Canadian Cannabis Retailer High Tide Reports Q2 Revenue Flat To Q1, Net Loss Of CA$1.6M

Canadian cannabis company High Tide HITI HITI 2LYA released Wednesday its second-quarter earnings report revealing revenue of $CA118.1 million ($88.5 million) up by 46% YoY, but flat compared to the previous quarter.

“We remain on track towards achieving our communicated goal of generating positive free cash flow by the end of calendar 2023. Our focus on operating efficiencies and the continued execution of our business plan has set us apart from many of our competitors, some of whom continue to experience significant operational and financial headwinds,” stated Raj Grover, president, and chief executive officer of High Tide.

Q2 Financial Highlights

• Net loss amounted to CA$1.6 million or CA$0.02 loss per share, compared to CA$3.6 million net loss and CA$0.05 loss per share in the previous quarter;
• Adjusted EBITDA was a gain of CA$6.6 million, which compares to positive adjusted EBITDA of CA$5.5 million in the first quarter;
• Gross profit was CA$31.6 million, versus CA$32.2 million in the previous quarter;
• Gross profit margin was 27%, the same as in the first quarter;
• Free cash flow was minus CA$1.95 million, versus minus CA$846,000 in the previous quarter.

“Our bricks-and-mortar margins have increased by approximately 1% every quarter for the last 5 quarters, and we feel there is further opportunity to increase margins in most markets where we operate,” Grover added. “Our same-store sales growth shows no sign of slowing down, as we saw a 5% sequential increase when calculated daily. While we are very proud to have achieved nearly 10% of the Canadian retail market share outside of Quebec, we believe there remains a significant opportunity to continue moving towards our goal of capturing 15% of this market.”

Outlook

High Tide is now working towards its goal of generating positive free cash flow by the end of calendar 2023. The company expects this to be achieved by increasing same-store sales, continued incremental upward momentum in gross margins in its Canadian bricks-and-mortar business, and strong cost controls. It plans to roll out more white-label SKUs of its Cabana Cannabis Co. brand through the course of the year, which should be additive to gross margins. High Tide added being  pleased with the initial uptake of Cabana ELITE, its premium paid membership offering, with over 13,500 customers having signed up to date. The company expecta this number to climb steadily in the coming quarters, which should add a recurring high-margin revenue line and further enhance customer loyalty.

Related News 

• Cannabis Retailer High Tide Achieves Record Revenue, EBITDA For Second Consecutive Quarter
• Canada's Top CEO Raj Grover Talks Cannabis And The Future Of Retail: Here's How To Meet Him In Person
• High Tide CEO Foresees Profit Spike, Illegal Seizures In Canada Rise More Than 900%, Press Freedom Stifled In Nigeria

Photo by Juanita Swart on Unsplash.