The stock plunged 27.2% as investors reacted negatively to broad operational weaknesses, including disappointing guidance, sales execution problems, margin pressure, and a cautious outlook for the remainder of 2026.

• Inventory liquidation and write-offs from discontinued and aged SKUs weighed on Q1 results.
• Elevated SG&A expenses were misaligned with current business scale, prompting immediate cost-cutting actions including headcount reductions.
• Multiple sales execution challenges affected topline, notably the disruption from packaging changes, limited promotional support, and missed category reviews limiting shelf placement.
• Gross margins compressed due to rising input and wholesale costs with pricing adjustments only starting late in the quarter.
• Management highlighted ongoing efforts to rebuild retail and distributor relationships, expand coverage through a third-party sales agency, revamp e-commerce initiatives, and implement operational improvements, but results remain below expectations with substantial recovery work ahead.