How Will Nutritional Growth Solutions’ New Retail Deals Impact Its Turnaround?
Nutritional Growth Solutions reported a 30% drop in revenue to US$867k for H1 FY25 but narrowed its loss to US$1.2 million, driven by cost discipline and new retail partnerships including Walmart and CVS.
- Revenue declined 30% to US$867,000 in H1 FY25
- Loss reduced by 8% to US$1.2 million
- Walmart SKU range expanded with new strawberry flavor
- Post-period launch into ~5,500 CVS stores underway
- Capital raised via convertible notes and share placement
Financial Performance and Operational Highlights
Nutritional Growth Solutions Ltd (ASX – NGS) has released its half-year results for the period ending 30 June 2025, revealing a mixed but cautiously optimistic picture. Revenue fell by 30% to US$867,000 compared to the prior corresponding period, reflecting ongoing challenges in market penetration and sales growth. However, the company managed to reduce its net loss by 8% to US$1.2 million, a sign of improved cost control and operational efficiency.
The operating loss improved by 16%, narrowing from US$1.08 million to US$909,000, underscoring management’s focus on tighter capital management and working capital optimisation. Despite the revenue decline, the company’s efforts to stabilise inventory and expand its retail footprint are notable.
Retail Expansion and Product Development
Key operational achievements include stabilising inventory levels to support approximately five months of sales for the Healthy Heights® product portfolio. The company expanded its Walmart presence to three SKUs, introducing a new strawberry flavor during a May reset, which has shown early positive in-store performance.
Post-period, Nutritional Growth Solutions completed launch shipments into around 5,500 CVS stores, with retail sell-through expected to begin in August 2025. This expansion into CVS represents a significant step in broadening the company’s US retail distribution and could be a catalyst for revenue growth in the coming quarters.
Capital Structure and Going Concern Considerations
The company’s balance sheet reflects ongoing challenges, with accumulated deficits exceeding US$20 million and negative cash flows from operations of US$633,000 for the half-year. To bolster liquidity, Nutritional Growth Solutions issued AUD 1 million in convertible notes in May 2025, which were fully converted into shares post-period, and completed a share placement raising approximately AUD 760,000 in August.
Additionally, the company terminated non-core US distribution agreements, providing net financial relief of around US$580,000 and removing ongoing obligations. These moves aim to strengthen the company’s financial position amid material uncertainties about its ability to continue as a going concern.
Outlook and Strategic Focus
Management remains focused on driving the pathway to profitability through US retail expansion and rigorous cost discipline. The success of the CVS launch and the Walmart SKU expansion will be critical indicators of the company’s ability to reverse revenue declines and improve cash flow. Investors will be watching closely for signs that these initiatives translate into sustainable growth.
Bottom Line?
Nutritional Growth Solutions is navigating a challenging market with strategic retail expansions and capital raises, but the road to profitability remains uncertain.
Questions in the middle?
- Will the CVS store rollout translate into meaningful revenue growth in upcoming quarters?
- How sustainable are the company’s cost-cutting measures amid ongoing operational losses?
- What impact will the termination of non-core US distribution agreements have on long-term market access?
