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Why did gross margins stay relatively stable over the past few years despite the price hikes?

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Thanks for your question Kenneth.

One big reason is because of their acquisition of Four Nines in 2022. Four Nines has a lower gross margin as they still have a high portion of 3rd party retail channel vs Kaneko which is almost entirely focused on direct retail.

In 2022 the gross margin looks higher than it should bc it only consolidates for 5months of (lower margin) four nines business. 2023 is when they got consolidated for the full year which is therefore a negative on Gross Margin vs 2022.

As they move the retail mix of fournines to more direct retail, gross margin should improve and we've already seen abit of this from FY23 -> FY 24.

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