JEWETT CAMERON TRADING CO LTD Q2 FY2025 earnings call

• Jewett-Cameron remains committed to improving lives with innovative products for professionals, DIYers, and dog owners.
• Focused on strategic plan to drive profitability, enhancing systems, improving processes, and expanding supply sourcing.
• Metal fence innovation: New Lifetime Steel Post displayers in many stores, strong point of sales data, demand for displayers growing.
• Tariff impact: Supply chain initiatives to multi-source production over past two years help mitigate tariff effects, but global steel tariff still impacts prices.
• Wood fence: Material constraints led to revenue decline, but maintain lumber program with major retailer.
• Pet products: Downstream inventory congestion, but online sales picking up and inventory reduced.
• Sustainable products: Growth of MyEcoWorld brand with online and grocery channel success.
• Greenwood: Sales increase, seed facility on market for monetization.

Metal Fence:

• Innovation in metal fence category driving growth. Exceeded target of getting new Lifetime Steel Post displayers into over 330 Home Depot and Lowe's stores by February, which is 65% more than three months prior. Revenue contribution from steel fence accessories increased, but initial high cost of domestically produced displayers reduced margin in first half of year; margin impact diminished by producing displayers overseas in Q2.

Wood Fence:

• Revenue fell slightly from last year due to material constraints.

Pet Containment:

• Downstream retail channel inventory congestion negatively impacted sales, but online sales for several pet products picked up recently. Pet inventory down over 17% from year ago and nearly 60% from peak in February 2023.

Sustainable Products:

• Transitioned to MyEcoWorld brand in 2023, with initial sales starting fall 2023. Growth strong over 15 months, driven by online performance, new grocery channel adoption, and success of post-consumer recycled plastic dog waste bags in Mexico. Relatively small revenue contributor overall but showing growth.

Greenwood:

• Sales increased 31% for the current quarter to $1.1 million compared to $0.9 million in Q2 of 2024.

• Growth initiatives like Lifetime Steel Post replenishment orders, anticipated reorders from Adjust-A-Gate displayer marketing, and onboarding new grocery retailers for sustainable bags expected to offset softness in pet solutions business.
• Monitor tariffs and inventory closely to adjust to seasonal sales demand.

• Tariff uncertainties affecting pricing and margins.
• Material constraints impacting wood fence revenue.
• Pet channel inventory congestion continuing to negatively impact sales initially.
• Fluid tariff landscape creating uncertainty for future margins.

Q: Robert Blum asks about why executive team hasn't purchased shares in the open market.

A: Chad Summers responds that management teams are often locked out from purchasing shares due to material information, and he will investigate further.