Ayr Wellness Reports QoQ Drop In Q2 Revenue & Gross Profit But Plans To Make The Most Of Ohio Cannabis Sales

Vertically integrated U.S. multi-state cannabis operator AYR Wellness Inc. AYR AYRWF reported second-quarter results for the three months ended June 30, 2024.

The Miami-based company reported a 16.6% year-over-year and 6.9% sequential drop in gross profit to $47.2 million.

David Goubert, president and CEO of AYR, said "the second quarter presented challenges due to both internal and external factors including wholesale pricing pressure, tightening consumer wallets from persistent inflation, and margin pressure in select markets where we have recently increased our cultivation and production, but which are not yet optimized."

Read Also: AYR Wellness Improves Financial Position YoY, Q1 Revenue And Gross Profit In Anticipation Of OH, FL And PA Cannabis Market Launches

Q2 2024 Financial Highlights

• Revenue totaled $117.3 million up from $116.7 million in the prior year's period and down by 0.6% quarter-over-quarter.
• Operating loss was $7.7 million, compared to $4.6 million operating loss in the second quarter of fiscal 2023 and $2 million operating loss in the prior period.
• Net loss was $39.3 million, compared to a $30.6 million net loss in the corresponding period of fiscal 2023.
• Adjusted EBITDA came in positive at $25.7 million, down 12.6% year-over-year and 11.7% sequentially.
• Adjusted EBITDA margin was 21.9%, compared to 25.2% in the prior year's quarter and 24.7% in the previous quarter.
• Ended the period with aggregate cash, cash equivalents, and a restricted cash balance of $47.5 million.

Second Quarter & Recent Highlights

• The company launched recreational cannabis sales in Ohio this week.
• Entered into an option agreement that provides AYR with the future ability to acquire 100% of Good Day Dispensary, LLC, a fourth Ohio dispensary license.
• Opened its third retail store in Illinois in June with AYR Cannabis Dispensary Hometown, located near Chicago Midway International Airport, and its fourth Illinois retail store in July with AYR Cannabis Dispensary Normal.

Q3 2024 Outlook

For the third quarter, AYR expects revenue growth to be up low to mid-single digits from the second quarter based on the timing and ramping of the Ohio adult-use rollout.

The company also expects to improve adjusted EBITDA margins from current levels in the second half of 2024 as it rebuilds toward its 25% adjusted EBITDA margin target.

"Looking beyond 2024, we will continue to focus on enhancing the overall health of the business to seek to ensure that AYR is poised for sustainable and profitable financial growth," Goubert continued. "We are pleased with the work we have done but remain focused on delivering further progress."

Read Next:

• Cannabis Company AYR Wellness Launches Gluten-Free Vegan Edibles, Targets $2B Market

AYRWF Price Action

Ayr Wellness' shares traded 4.71% higher at $2 per share after the market close on Tuesday.