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BranchOut Food Q1 Loss Widens Y/Y Amid Inventory Build for Q2 Growth
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Shares of BranchOut Food Inc. (BOF - Free Report) have declined 2.2% since reporting results for the first quarter of 2026 compared with the S&P 500 index’s 0.1% fall. Over the past month, the stock has fallen 16.9%, while the S&P 500 has returned 4.5%.
BranchOut reported first-quarter 2026 net revenues of $2.6 million, down 18% from $3.2 million in the prior-year quarter, while net loss widened to $1.8 million from $918,382 a year earlier. Gross profit declined 24% to $400,660 and the gross margin narrowed to 15.4% from 16.7% in the year-ago period.
Loss per share widened to 12 cents from 11 cents in the prior-year quarter. The company attributed the weaker top-line performance primarily to planned maintenance at its Peru manufacturing facility and the timing of a major customer shipment that was pushed into the second quarter.
BranchOut Food Inc. Price, Consensus and EPS Surprise
Management said first-quarter production levels recovered by the end of the quarter, with March 2026 recording the company’s highest monthly kilogram output to date. Inventory climbed 69% sequentially to $4 million at the quarter-end from $2.4 million at Dec. 31, 2025, reflecting inventory build ahead of anticipated second-quarter deliveries.
Cost of goods sold decreased 16% year over year to $2.2 million due to lower sales volumes. However, BranchOut continued to face pressure from lower plant utilization and an unfavorable sales mix weighted toward lower-margin bulk ingredient sales. The company’s adjusted gross margin, a non-GAAP metric excluding depreciation and certain air freight costs, declined to 20.8% from 26.7% a year earlier.
Operating expenses rose sharply to $2 million from $1.2 million in the prior-year quarter. General and administrative expenses more than doubled to $859,220, primarily because of idle-capacity costs tied to the Peru facility operating below normal utilization levels. Salaries and wages increased 112% to $666,336 due to stock-based compensation and annual wage increases. Professional fees rose modestly, while shipping and handling expenses increased 46% because of higher freight rates. Advertising and promotions expenses declined 42% due to lower branded-product promotional activity during the quarter.
Management Commentary & Operational Progress
Chief executive officer Eric Healy described the quarter as primarily an “inventory build and operational ramp up” period ahead of expected record second-quarter deliveries. Management highlighted record production levels of approximately 46,000 kilograms per month during March and into the second quarter, driven by major customer orders and increasing ingredient sales.
BranchOut also emphasized expanding relationships with large retail and warehouse-club customers. During the second quarter, the company shipped what it described as the largest order in its history to the nation’s second-largest warehouse club retailer for nationwide placement of Crunchy Fruit Chips in more than 600 locations. Early sales data reportedly exceeded retailer expectations, and management estimated that a permanent placement program could represent roughly $15 million in annual recurring revenues.
The company additionally reported continued momentum with the nation’s largest warehouse club retailer through regional pineapple-chip orders, a mango-chip launch in the Bay Area, and potential multi-pack back-to-school offerings. Management also cited strong interest from the world’s largest retailer following an innovation presentation featuring more than 35 product concepts across multiple snack categories.
Outlook & Growth Initiatives
BranchOut expects the second quarter of 2026 to be a record revenue quarter, driven by large customer deliveries and increasing production throughput. The company also projected its ingredient and bulk supply business to generate $6 million to $7 million in revenues during 2026, whereas it reported nearly $2 million in 2025.
Management disclosed that it is nearing finalization of a large-scale tolling partnership with a major household brand. Under the proposed structure, the customer would supply raw materials while BranchOut provides manufacturing services. The arrangement could potentially generate $6-$7 million in annual revenues with a significantly higher margin profile due to reduced raw-material costs.
Other Developments
In the quarter, BranchOut continued expanding its Peru manufacturing infrastructure and production capacity. The company also secured additional financing support from Kaufman Capital, including a $1.5-million senior secured promissory note in January 2026 and an additional $750,000 borrowing after the quarter-end. In May 2026, Kaufman Capital exercised warrants for 500,000 shares, providing another $750,000 in cash while also extending the maturity of the company’s convertible note to Dec. 31, 2027 and reducing its interest rate to 8% from 12%.
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BranchOut Food Q1 Loss Widens Y/Y Amid Inventory Build for Q2 Growth
Shares of BranchOut Food Inc. (BOF - Free Report) have declined 2.2% since reporting results for the first quarter of 2026 compared with the S&P 500 index’s 0.1% fall. Over the past month, the stock has fallen 16.9%, while the S&P 500 has returned 4.5%.
BranchOut reported first-quarter 2026 net revenues of $2.6 million, down 18% from $3.2 million in the prior-year quarter, while net loss widened to $1.8 million from $918,382 a year earlier. Gross profit declined 24% to $400,660 and the gross margin narrowed to 15.4% from 16.7% in the year-ago period.
Loss per share widened to 12 cents from 11 cents in the prior-year quarter. The company attributed the weaker top-line performance primarily to planned maintenance at its Peru manufacturing facility and the timing of a major customer shipment that was pushed into the second quarter.
BranchOut Food Inc. Price, Consensus and EPS Surprise
BranchOut Food Inc. price-consensus-eps-surprise-chart | BranchOut Food Inc. Quote
Revenue Trends & Operating Metrics
Management said first-quarter production levels recovered by the end of the quarter, with March 2026 recording the company’s highest monthly kilogram output to date. Inventory climbed 69% sequentially to $4 million at the quarter-end from $2.4 million at Dec. 31, 2025, reflecting inventory build ahead of anticipated second-quarter deliveries.
Cost of goods sold decreased 16% year over year to $2.2 million due to lower sales volumes. However, BranchOut continued to face pressure from lower plant utilization and an unfavorable sales mix weighted toward lower-margin bulk ingredient sales. The company’s adjusted gross margin, a non-GAAP metric excluding depreciation and certain air freight costs, declined to 20.8% from 26.7% a year earlier.
Operating expenses rose sharply to $2 million from $1.2 million in the prior-year quarter. General and administrative expenses more than doubled to $859,220, primarily because of idle-capacity costs tied to the Peru facility operating below normal utilization levels. Salaries and wages increased 112% to $666,336 due to stock-based compensation and annual wage increases. Professional fees rose modestly, while shipping and handling expenses increased 46% because of higher freight rates. Advertising and promotions expenses declined 42% due to lower branded-product promotional activity during the quarter.
Management Commentary & Operational Progress
Chief executive officer Eric Healy described the quarter as primarily an “inventory build and operational ramp up” period ahead of expected record second-quarter deliveries. Management highlighted record production levels of approximately 46,000 kilograms per month during March and into the second quarter, driven by major customer orders and increasing ingredient sales.
BranchOut also emphasized expanding relationships with large retail and warehouse-club customers. During the second quarter, the company shipped what it described as the largest order in its history to the nation’s second-largest warehouse club retailer for nationwide placement of Crunchy Fruit Chips in more than 600 locations. Early sales data reportedly exceeded retailer expectations, and management estimated that a permanent placement program could represent roughly $15 million in annual recurring revenues.
The company additionally reported continued momentum with the nation’s largest warehouse club retailer through regional pineapple-chip orders, a mango-chip launch in the Bay Area, and potential multi-pack back-to-school offerings. Management also cited strong interest from the world’s largest retailer following an innovation presentation featuring more than 35 product concepts across multiple snack categories.
Outlook & Growth Initiatives
BranchOut expects the second quarter of 2026 to be a record revenue quarter, driven by large customer deliveries and increasing production throughput. The company also projected its ingredient and bulk supply business to generate $6 million to $7 million in revenues during 2026, whereas it reported nearly $2 million in 2025.
Management disclosed that it is nearing finalization of a large-scale tolling partnership with a major household brand. Under the proposed structure, the customer would supply raw materials while BranchOut provides manufacturing services. The arrangement could potentially generate $6-$7 million in annual revenues with a significantly higher margin profile due to reduced raw-material costs.
Other Developments
In the quarter, BranchOut continued expanding its Peru manufacturing infrastructure and production capacity. The company also secured additional financing support from Kaufman Capital, including a $1.5-million senior secured promissory note in January 2026 and an additional $750,000 borrowing after the quarter-end. In May 2026, Kaufman Capital exercised warrants for 500,000 shares, providing another $750,000 in cash while also extending the maturity of the company’s convertible note to Dec. 31, 2027 and reducing its interest rate to 8% from 12%.