GrowGeneration Corp. GRWG, one of the nation’s top providers of hydroponic and organic gardening products, announced certain preliminary unaudited results Monday for the second quarter of 2024, alongside a strategic restructuring plan aimed at boosting profitability. The company’s net revenue is projected to surpass $53 million, marking a 10.6% increase from the previous quarter’s $47.9 million.
Restructuring Plan Targets $12 Million Savings
The restructuring plan is designed to save approximately $12 million over the next year. Key areas of focus include enhancing proprietary brands, digital transformation and streamlining operations. GrowGeneration aims for proprietary brands to constitute 35% of total sales by the end of 2025, adding around 50 new products within the next 12 months. The company has also launched an e-commerce website for The Harvest Company and plans to introduce a B2B e-commerce portal by Q4 2024.
GrowGeneration Closes 19 Stores For Efficiency
Operational streamlining involves closing 19 underperforming stores, seven of which were already shut down in the first half of 2024. The remaining closures are expected within 90 days, leaving GrowGeneration with 31 operational stores. The company plans to retain most commercial and walk-in customers through adjacent locations, a commercial sales force and the upcoming B2B portal. Reorganization of sales, marketing and administrative activities aims to reduce expenses, increase margins and improve profitability.
CEO Lampert Highlights Restructuring Strategy
Darren Lampert, GrowGeneration’s co-founder and CEO, who attended the Benzinga Cannabis Market Spotlight Conference in New Jersey in June, emphasized the importance of the restructuring efforts. “We believe GrowGen can better serve these customers and extend our market reach by emphasizing our proprietary brands and launching an enhanced B2B e-commerce platform,” said Lampert in a press release. “We are committed to implementing these changes swiftly and effectively, ensuring that GrowGen remains a leader in the hydroponics and organic gardening supply industry and well-positioned to expand into other markets in the future."
By optimizing inventory management, enhancing strategic vendor relationships and improving freight expense recovery, GrowGeneration aims to drive higher margins and achieve long-term profitability. The comprehensive restructuring plan is a strategic move to align the company’s operating model with its growth initiatives, ultimately positioning GrowGeneration for future market expansion.
GRWG Price Action
GRWG's shares were trading 1.57 lower at $2.50 per share at the time of this writing around noon ET Wednesday.
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Photo: Courtesy of Artem Avetisyan via Shutterstock.
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Cannabis rescheduling seems to be right around the corner
Want to understand what this means for the future of the industry? Hear directly for top executives, investors and policymakers at the 19th Benzinga Cannabis Capital Conference, coming to Chicago this Oct. 8-9. Get your tickets now before prices surge by following this link.