High Tide Inc. (Nasdaq: HITI) (TSXV: HITI) reported record revenue in its fiscal first quarter, which ended on Jan. 31. In conjunction with the earnings release, the Canna Cabana retail chain operator addressed the recent halt to an acquisition in Germany and lower EBIDTA on its balance sheet.
The company’s C$142.5 million in sales for the quarter exceeded Yahoo Finance analyst estimates of C$138.83 million and beat even the high-end projection of C$140.8 million.
The results represent an 11% increase in revenue year-over-year and 3% sequential growth as the company continues its aggressive expansion across Canada.
The company posted same-store sales growth of 5% versus the previous year, marking the fastest pace of growth in four quarters, according to the earnings release Monday afternoon.
“I am pleased to report yet another quarter featuring record revenue,” CEO and founder Raj Grover said in a statement. “This continued momentum is supported by our core Canadian bricks-and-mortar business which is generating double digit growth, and continues to get stronger every day.”
The company reported adjusted EBITDA fell to C$7.1 million, down 32% from the same period last year and 14% from the previous quarter. High Tide attributed the decline to accelerated store openings and a new international loyalty strategy.
“I also want to address the lower EBITDA number head on,” Grover said. “This was due to a purposeful shift in our strategy to win market share in our ancillary business lines, which will provide long-term benefits by expanding our Cabana Club globally and diversifying our customer base.”
The company posted a net loss of C$2.7 million for the quarter, versus breaking even in the same period a year ago. High Tide also reported negative free cash flow of C$1.9 million, which it said resulted from “heightened investments in working capital” representing the largest cash outflow in seven quarters.
High Tide has been aggressively expanding its store footprint, opening five new Canna Cabana locations during the quarter and an additional three locations after the quarter closed. The company currently operates 194 stores across Canada and aims to add 20-30 locations during calendar 2025 while maintaining its long-term goal of 300 Canadian stores.
The company’s Cabana Club loyalty program continued to expand rapidly, growing to more than 1.76 million members in Canada, up 33% year-over-year. Its premium ELITE membership tier exceeded 81,000 members, growing 153% year-over-year and 11% sequentially, which the company noted was “its fastest pace since inception.”
The company also addressed its previously announced plans to enter the German medical cannabis market. High Tide paused its acquisition of a 51% interest in Purecan GmbH during ongoing due diligence to “explore alternative arrangements” while maintaining a commitment to the German market.
The cannabis retailer noted that its brick-and-mortar segment, which accounts for 95% of consolidated revenue, saw 17% year-over-year growth in the quarter, reaching C$135.7 million. This represented “the fastest growth rate in five quarters,” according to the company.
The earnings announcement comes just days after SNDL Inc. (NASDAQ: SNDL) disclosed in regulatory filings that it had acquired a 5.4% stake in High Tide, purchasing 4.35 million shares on March 10. The move by Canada’s largest private-sector cannabis retailer, which operates 187 stores under brands including Value Buds and Spiritleaf, fueled speculation about a potential takeover attempt.
Grover acknowledged the SNDL investment in a March 13 social media post, saying: “We acknowledge today’s filing from SNDL, which underscores the significant undervaluation of our shares and serves as further validation of the superior business we have built compared to our peers.” Grover added that the company’s board and management “remain fully committed to acting in the best interests of our shareholders.”
[[{“value”:”The Canadian cannabis retailer has been focused on aggressive expansion while attracting investment from SNDL just days before earnings.
The post High Tide beats sales estimates, but records loss as its continues its rapid expansion appeared first on Green Market Report.”}]] Read More
