After making three acquisitions in two years, Starco Brands Inc. is now working on integrating its acquisitions and finding efficiencies while building out its shared service platform and positioning the company for long-term success.

Ross Sklar, the chief executive of Starco, said the Santa Monica-based company is sitting in a comfortable position today.

The mission of Starco Brands is to create products or brands that are “absolutely behavior changing,” Sklar said.

“That is a step above just innovation. People say, ‘I’m innovative, he’s innovative,’ but these are products that are able to change someone’s habitual behavior for the better,” he added.

“If we can land on products that meet that modus operandi or ideology and then put that through our machine of marketing and merchandising and our e-commerce platform and retail platform, then it gives us the best odds of winning, and our brands are reflective of that,” Sklar said.

Starco acquired Art of Sport, the body care brand designed for athletes co-founded by the late Kobe Bryant, in September 2022; Skylar, a fragrance that is safe for sensitive skin, in December 2022; and Soylent, a maker of meal replacement drinks, high protein beverages, powders and bars, in February of last year.

Additionally, Starco is the marketer of record, but not the owner of record, of Winona Butter Flavor Popcorn Spray. The brands Starco incubated itself includes Whipshots, a vodka-infused whipped cream done in collaboration with hip-hop artist and actress Cardi B.

Stock price falters

And while the company’s share prices have seen some small increases corresponding with some big announcements from the company, it has overall declined, losing 44% of its value in the past year.

The consumer products manufacturer and distributor provided its second quarter financials after the market closed on Aug. 13 when its share price closed at 8 cents. The following day it closed at 10 cents – for an increase of 25%.

The 767,600 shares traded on Aug. 14 was the highest in the company’s history. The previous trading volume high of 380,300 was reached on March 25.

The shares then dropped to 9 cents for four days before increasing again to 10 cents a share for nearly the next two weeks.

The shares closed at 9 cents on Sept. 19.

Starco reported a net loss of $11.6 million (-2 cents a share) for the second quarter ending on June 30, as compared to net loss of -$6 million (-1 cent) in the same period of the previous year. Revenue decreased by about 11% from the second quarter of the prior year to $15.6 million.

“The decrease in reported net revenue was driven by a decrease in sales for Whipshots due to large fourth quarter of last year and first quarter of this year inventory purchases, partially offset by an increase in sales for Skylar and Winona Popcorn Spray,” the company said in a press release.

Still, Sklar said the company is not focused on increasing its share price but rather strengthening the company as a whole.

“We don’t want to see anything that is going to artificially increase the stock price because eventually it will come back down,” he said.

Instead, he continued, the employees are focused on building a great business that has recurring revenue and a sticky customer base, that throws off very strong growth margins and is healthy, Sklar said.

“Eventually the more we grow and the more we expand if you do things right the stock price will eventually catch up,” Sklar added. “That is where our focus is.”

Brands make progress

The various brands under the Starco banner have all seen gains, according to the company.

For example, Whipshots expanded into new markets such as Alabama, North Carolina and Pennsylvania earlier this year. The brand is now available across 46 states and Washington, D.C.

Whipshots has landed 1,257 points of distribution in Kroger and will be in more locations this fall.

Skylar also recently rolled out the Hair & Body Mist format of its Boardwalk Delight to skylar.com and sephora.com, as well as Sephora brick-and-mortar retail locations.

Skylar is growing within Sephora and has new authorizations to enter the rapidly growing Sephora@Kohl’s channel.

“With a successful launch on the Sephora@Kohl’s e-commerce platform, the brand now has the potential to be on shelf in the over 850 Sephora@Kohls locations,” the company said in a release.

Soylent, meanwhile, continues to be the top selling meal replacement shake on Amazon.com Inc., with 23.6% of total meal replacement market share. Because of this ranking the brand’s return on ad spend in this channel remains high, according to Starco.

The high-margin sales generated by efficient marketing spend and investment on Amazon make this channel a priority focus for the second half of the year, the company added.

Finally, Art of Sport relaunched on Amazon in the first quarter focusing on the brand’s best-selling personal care products and scents. The new line consists of the following products: antiperspirant, deodorant, shampoo and body wash, daily face wash and daily face lotion, the release continued.

Art of Sport continues to grow on Amazon and in the second quarter experienced quarter over quarter growth of 32%.
In the third quarter, Art of Sport has plans to launch more products in the over-the-counter pharma space, including a Cooling Muscle Spray and a Cool & Heat Muscle Spray.

“As Art of Sport has demonstrated success within e-commerce, it will look to grow its retail footprint with a strategic mass retailer in the second half of the year,” the company announced earlier.

Sklar, the company’s chief executive, said Starco is always looking at growth.

“We have a tremendous amount of organic growth that we are trying to build into for our existing portfolio of brands,” he said.

“We intend to execute on a really robust plan in 2025 and quite frankly are really excited about it,” he added.