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Naples Soap Company (OTC: GNSG) reported a robust 47% revenue increase for 2021, reaching $10.9 million. Retail sales surged by 71%, while wholesale revenue grew by 41%. Despite no new store openings in 2021, the company plans to launch three stores in 2022. Operating expenses rose by 36% due to increased wages and marketing efforts, yet net income soared to $1.327 million from $63,438 in 2020. Challenges like supply chain disruptions and inflation are anticipated in 2022, but management aims to mitigate these through improved efficiencies.
Positive
Revenue increased by 47% to $10.9 million in 2021.
Net income surged to $1.327 million from $63,438 in 2020.
Retail sales grew 71%, contributing significantly to overall revenue growth.
Plans to open three new retail locations in 2022.
Negative
Operating expenses rose by 36%, primarily due to increased wages and benefits.
Supply chain disruptions affected packaging and raw materials.
Inflation concerns regarding rising shipping, manufacturing, and employee costs.
NAPLES, Fla.--(BUSINESS WIRE)--
Naples Soap Company, Inc (OTC: GNSG), a health and wellness brand that offers high-quality personal care products, including soap, hair, face and skin care products, today announced fourth quarter and full year 2021 financial results for the period ending December 31, 2021.
“I am very pleased with the trajectory that we are on. 2020 was a strong year for our Company, and we topped those results yet again in 2021 thanks to robust sales in our retail footprint and our wholesale division. We experienced a 47% increase in total annual revenue for 2021 over 2020, surpassing $10 million in sales in 2021,” said Deanna Wallin, founder and Chief Executive Officer of Naples Soap Company. “Although we did not open any new stores in 2021, our retail sales were up over 71% compared to the prior year, which is one of the reasons why we are moving forward with plans to open three new stores in 2022. Just as we saw a return to in-person retail shopping, our wholesale division also experienced a lift in sales associated with that same trend. Our wholesale sales were up 41% from 2020 to 2021. We did experience some supply chain disruptions over the course of the year associated with packaging and raw material shortages. Still, we overcame these challenges and maintained a solid inventory of our core products to sell both in stores and online. Inflation remains at the forefront of our projections for 2022 as shipping expenses, manufacturing costs, employee costs and retail rents continue to increase. However, we are deeply focused on containing or offsetting these costs through improved efficiencies, manufacturing opportunities and inventory controls.”
Full Year Results
Revenue grew in 2021 by 47% to $10.9 million, led by a 71% growth in store sales. Wholesale revenue grew by 41%, and e-commerce revenue grew by 6.5%.
Operating expenses increased by 36%, driven primarily by the higher cost in wages and benefits. Additionally, we remodeled our flagship store at Tin City in Naples, our Fishermen’s Village store in Punta Gorda and retrofitted several other locations with new fixtures and product displays. Marketing and advertising expenses also rose as we increased our digital outreach efforts through email campaigns, paid social advertising, third-party affiliates and website enhancements. Lastly, the Company incurred new expenses associated with taking the Company public.
The Company experienced a one-time gain through the Paycheck Protection (PPP) loan forgiveness program and the Employee Retention Tax Credit refund to the tune of nearly $530,000.
The Company reported a net income for 2021 of $1.327 million, up from $63,438 in 2020.
2021 Business Highlights
Reverse Merger: On June 30, 2021, Naples Soap entered into a reverse merger transaction with The GNS Group, Inc (“GNSG”). Naples Soap was the accounting acquirer and is a wholly owned subsidiary of GNSG. The Company is a publicly traded company on the OTC Marketplace with the ticker symbol GNSG.
2022 Retail Expansion Plans: The Company entered into three lease agreements in 2021 to lease retail space for new store locations that are currently excluded from the 2021 financials. The store locations are in Kissimmee (which opened in March of 2022), Boca Raton, and Santa Rosa Beach, Fla.
Operations Expansion: The Company signed a lease in July of 2021 to relocate the Company’s warehouse and corporate headquarters to a larger facility just miles from its current location in Fort Myers, Fla.
Expanded Our Consumer Gifting Program: The Company expanded its gift focus with over 100 gift sets launched over the course of the year of best-selling scent collections and specialty gifts for birthdays, special occasions, and holidays.
Product Expansion: The Company added several new collections and products to its product line-up. These expansions included the Honey Almond scent collection, more Vitamin C face and body care items, and more SPF face care.
Stock Symbol Update: The Company is continuing the process of changing the stock ticker symbol from GNSG to a trading symbol, and that is more aligned with the Naples Soap Company name and brand.
Fourth Quarter Results
“The fourth quarter is always our strongest due to holiday sales, and this year was no different,” said Wallin. “Our total income for the fourth quarter of 2021 was $3.362 million or 29% over 2020. 71% of our fourth quarter 2021 income came from our retail footprint where our gift sets, spa and home accessories, and core products sold very well.”
On the expense side, fourth quarter retail wages were up 24% over the same period in 2020 because the Company brought on more staff to manage higher retail traffic and to cover extended holiday hours. Additionally in July of 2021, Naples Soap Company signed a lease to relocate the Company’s warehouse and corporate offices to a larger facility. This facility is currently in the permitting and planning stages for the interior build-out; however, the Company started incurring rent expenses for the property, which doubled the corporate office occupancy expenses from the same time period in 2020. The Company also incurred more expenses relative to the warehouse wages for the fourth quarter due to demand associated with fulfilling e-com orders and store replenishments.
Net income for the fourth quarter of 2021 was $175,917.
About Naples Soap Company
Founded in 2009 by Deanna Wallin, Naples Soap Company is a producer of more than 300 bath, body and personal care products that are made in the USA. Products are sold at the Company’s soon-to-be 13 retail locations in Florida. Naples Soap Company products are sold online from the Company’s website at www.naplessoap.com, through other DTC (direct-to-consumer) channels such as Amazon.com and in more than 300 boutiques, spas and stores throughout the United States via the Company’s wholesale division. For more information about Naples Soap Company, visit www.naplessoap.com. (OTC: GNSG).
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are subject to uncertainty and may not come to fruition. Readers are cautioned not to place undue reliance on any forward-looking statement including statements that list numbers and dates.
