GrowGeneration Stock Dives On Revised FY21 Revenue Outlook Of $420-$422M

Hydroponics innovator GrowGeneration Corp. GRWG reported its revised full-year 2021 revenue expectations of $420 million to $422 million, versus $193 million for 2020 - an increase of 118%.  

The fourth-quarter revenue expectation is between $88 million to $90 million. Same-store sales for 2021 are expected to grow 24.4% for the full year and decline 12.3% for the fourth quarter, according to the Thursday report.

"We delivered strong shareholder value in 2021 with triple digit revenue growth despite unprecedented persistent challenges and an uncertain operating environment,” GrowGen CEO Darren Lampert stated. "Although we continue to grow our business significantly, we experienced stronger-than-expected pressures in Q4 from the general slowdown in the hydroponics market. The sales results for Q4 combined with one-time expenses will result in a loss for the quarter of between $2 million and $4 million in EBITDA on an adjusted basis. We did improve our inventory position throughout the quarter to align inventory levels with sales activities."

2021 Financial Highlights:

• Full-year 2021 projected EBITDA adjusted for stock-based compensation between $31.5 million to $33.5 million, versus $19.2 million for full-year 2020
• Same-store-sales increase of 24.4% for full-year 2021 compared to 2020
• Same-store sales decrease of 12.3% for fourth quarter 2021 compared to the same year-ago period
• A total of 24 new and acquired store locations in 2021, now with 62 locations nationwide

The company noted it will provide more financial details in early March 2022.

Lampert added the company is relying on certain initiatives to deliver revenue and EBITDA growth this year.

“We believe the management team in place now is better suited than any other team in the industry to drive profitable growth over the next decade."

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Price Action 

GrowGen’s shares traded 11.08% lower at $9.87 per share at the time of writing Thursday. 

Photo: Courtesy of Joel Muniz on Unsplash