Charles & Colvard Ltd reported for the fourth quarter ended June 30, 2023 result. Don O’Connell, President and CEO- Charles & Colvard said, “While the challenging macroeconomic backdrop and weakened consumer outlook created significant headwinds on the jewelry and gemstone industry, and on the Company’s Q4 and fiscal year 2023 revenues, the Company’s cash position remained strong at $15.6 million.
The downward pricing pressure on moissanite and lab grown diamond impacted margins and, as a result, the Company recently revaluated its supply chain, gemstone cost, pricing methodology and go-to-market strategy,”
“We firmly believe that our proactive measures, combined with our unwavering determination, will enable us to overcome the obstacles that we and the industry have encountered and pave the way for a brighter future. We are confident that our long-term business strategy will create long-term value for our shareholders.
As we continue to look ahead, we remain optimistic and excited about the future prospects of the Company and our commitment to the Company’s strategic initiatives,” concluded O’Connell.
Under the Financial Summary for Fourth Quarter Fiscal 2023 Charles & Colvard said, net sales of $5.6 million for the quarter, a decrease of 40% from $9.3 million in the year-ago quarter. In the Online Channels segment, which consists of e-commerce outlets including Charlesandcolvard, moissaniteoutlet, charlesandcolvarddirect.
Third-party online marketplaces, drop-ship retail and other pure-play e-commerce outlets, net sales of $4.2 million, a decrease of 27% from the year-ago quarter, representing 75% of total net sales for the quarter, compared to $5.7 million, or 62% of total net sales in the year-ago quarter.
In the Traditional segment, which consists of wholesale and brick-and-mortar customers, net sales of $1.4 million, a decrease of 61% from the year-ago quarter, representing 25% of total net sales for the quarter, compared to $3.6 million, or 38% of total net sales, in the year-ago quarter.
Finished jewelry net sales of $4.7 million, a decrease of 23% for the quarter, compared to $6.1 million in the year-ago quarter. Loose jewel net sales decreased 73% to $0.9 million for the quarter, compared to $3.2 million in the year-ago quarter.
Cost of goods sold increased 92% to $10.6 million for the quarter, compared to $5.5 million in the year-ago quarter. The current quarter included a $5.9 million inventory write-down of certain moissanite and lab-grown diamond raw material and gems.
Gross loss was $5.0 million for the quarter, compared to gross profit of $3.8 million in the year-ago quarter. The current quarter included a $5.9 million inventory write-down of certain moissanite and lab-grown diamond raw material and gems.
Operating expenses increased 16% to $4.3 million for the quarter, compared to $3.7 million in the year-ago quarter, primarily due to increased investment in marketing strategies and new initiatives. Net loss was $9.3 million, or $0.30 loss per diluted share for the quarter, compared to net income of $0.04 million, or $0.00 earnings per diluted share, in the year-ago quarter. The current quarter included a $5.9 million inventory write-down referred to above.
Weighted average diluted shares outstanding were 30.3 million for the quarter, compared to 31.2 million in the year-ago quarter.
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