SunOpta (NASDAQ:STKL) shares rose to their highest level since June on fourth-quarter results that beat Street expectations, despite market challenges faced by plant-based food options.
The company makes 80% of its revenue from beverages and broths, followed by 15% from fruit snacks. The rest 5% comes from ingredients and smoothie bowls. In 2023, SunOpta sold its frozen fruit business and transformed its portfolio into a 100% value-added portfolio.
The actions were up to 19% from the close of business on Wednesday.
The company earned adjusted earnings of $0.05 per share, compared to $0.02 in the same quarter last year and a cent better than expected. This was a 13.7% sales increase to $181.6 million, achieved through volume growth and nearly $10 million better than expectations. The company’s adjusted gross profit margin fell 50 basis points to 17.3% on an 80 basis point increase in depreciation of new production equipment.
Adjusted EBITDA from continuing operations increased 17.5% to $22.3 million, or 12.3% of revenues compared to 11.9% of revenues in the fourth quarter of 2022.
On the balance sheet, the company’s total debt fell 14% to $263.2 million, while total assets fell 22% to $669.4 million.
“Fourth quarter revenue and adjusted EBITDA exceeded expectations reflecting strong execution against our strategic priorities focused on operational excellence and growth. We are reaffirming our outlook for 2024 reflecting a high degree of confidence in the direction and trajectory of our business,” said CEO Brian Kocher.
For 2024, SunOpta (STKL) expects revenue growth of 6%-11% to $670 million to $700 million versus the consensus estimate of $684.6 million. Adjusted EBITDA is expected to grow 11%-17%.
In its earnings call, SunOpta (STKL) outlined its priorities for the future that include expanding nutritional beverages and accelerating growth in the Better-For-You snacks segment, both of which have earnings potential of over 250 million dollars.