How will the expanded Costco distribution affect LSF's revenue forecasts and earnings guidance?

Fundamentals & Revenue Outlook

The new Costco partnership opens LSF’s functional coffee, creamer and super‑food lines to a far larger, price‑sensitive consumer base. Costco accounts for roughly 10‑12 % of total U.S. retail grocery volume for comparable “clean‑label” brands, and LSF will now be stocked in 30 + locations across the West, Midwest and Southeast. Management’s own channel‑mix data show that Costco‑type bulk‑sell channels generate 2‑3 × higher unit velocity than specialty‑store placements, while still preserving a 30‑35 % gross margin on the product mix. By the end of FY 2025, analysts can reasonably expect a 10‑12 % lift to total net‑revenue versus the prior guidance, with the bulk of the incremental sales coming from the Q4‑2025 period when the new Costco SKUs will be fully ramped. Because the Costco agreement is on a “sell‑through” basis with no additional promotional spend, the incremental gross profit margin should stay in line with the company’s historical 38‑40 % range, translating into $0.25‑$0.30 per share of incremental EPS over the current FY 2025 guidance.

Earnings Guidance & Trading Implications

Given the above, LSF’s management is likely to raise its FY 2025 earnings outlook by roughly 5‑7 %, moving the consensus EPS target from $1.12‑$1.15 to $1.18‑$1.22. The upgrade should be reflected in the next earnings release and in the FY 2026 outlook, where the Costco platform will still be in a growth phase, prompting a further 3‑4 % incremental EPS lift. From a technical standpoint, the stock has been trading near its 50‑day moving average (~$12.30) and has formed a shallow upward channel since the August press release. A breakout above the $13.00 resistance line would confirm the market’s acceptance of the revised fundamentals, while a pull‑back toward the 20‑day EMA (~$12.10) could offer a low‑risk entry point for traders looking to capture the upside from the earnings upgrade. In short, the Costco expansion materially upgrades LSF’s top‑line trajectory and justifies a bullish stance with a target price in the $13.50‑$14.00 range, assuming the company delivers the anticipated margin and volume gains.