Canadian Cannabis SNDL Achieves Break-Even Free Cash Flow For 2024

On Tuesday, SNDL Inc. SNDL reported fourth-quarter sales of CA257.68 million, up 3.7% year over year, beating the consensus of CA248.10 million.

Net revenue for 2024 was CA920.4 million, up 1.3%.

The company says the quarter and the full year represent new records for the corporation, driven by strong growth from the combined cannabis business of +16.5% in the fourth quarter and +10.6% over the full year.

Net revenue for liquor retail continued to decline in the fourth quarter to CA154.08 million, down 3.4%, although slightly slower than in previous quarters, amid market demand softness.

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Same-store sales decreased by -3.5% in the fourth quarter and -4.6% for the full year.

“We are pleased with the continued progress reflected in our fourth-quarter and full-year 2024 results, as we set new records and exceeded our commitment to achieving break-even free cash flow for the year. We have accomplished this while continuing to transform our business by investing in growth opportunities and strengthening our organizational capabilities,” said Zach George, CEO of SNDL.

Net revenue for cannabis retail grew 10.7% to CA83.17 million as the Value Buds banner continues to gain market share. The company also conducted some additional promotional activities in the fourth quarter.

Same-store sales increased by +6.3% in the fourth quarter and +3.5% over the full year.

Cannabis operations reported a 42.4% jump in sales to CA37.09 million, driven by the increased provincial board and Business-to-Business distribution.

The cannabis company reported a gross profit of CA68.8 million in the fourth quarter of 2024 and CA240.3 million for 2024, representing growth of +20.0% and +26.2%, respectively.

SNDL reported an operating loss of CA76.1 million for the fourth quarter of 2024, driven by a negative valuation adjustment of the SunStream portfolio of CA65.7 million, a Spiritleaf intangible write-off of CA15.0 million and restructuring charges of CA0.6 million.

Cash flow was negative by $(44.6) million in the fourth quarter of 2024, driven by the acquisition of Nova’s minority equity interest and the repurchase of SNDL’s common shares.

Full-year cash flow was positive by $23.3 million. Free cash flow was positive in the fourth quarter at $11.6 million and $8.9 million for 2024.

Price Action: SNDL stock is up 4.52% at $1.62 during the premarket session at the last check Tuesday.

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