Tilray Brands, a prominent player in the global cannabis-lifestyle and consumer packaged goods sector, has recently disclosed its financial results for the third quarter (Q3) ended February 29, 2024. Despite delivering notable growth in certain segments, the company’s stock witnessed a downturn following the announcement. As of the time of reporting, the stock is trading at $2.08, representing a decline of 19.69%.
Tilray Brands Q3 Results Market Impact
After the release of its Q3 results, Tilray Brands’ stock is currently undergoing a decline. As of the latest update, the stock is trading at: Index Symbol Quote Change % Volume Avg Analyst Rating Book Value TLRY Tilray Brands, Inc. $2.08 -0.51 -19.69% 55,893,733 2.7 – Hold $4.596
Tilray Brands Q3 Results Financial Highlights
In the third quarter, Tilray Brands showcased commendable financial performance, with net revenue reaching $188.3 million, marking a substantial 30% increase compared to the previous year. The company reported a gross profit of $49.4 million, accompanied by adjusted gross profit of $51.6 million, reflecting a 17% increase. Notably, beverage-alcohol net revenue witnessed a remarkable surge of 165%, reaching $54.7 million, driven by recent acquisitions and consistent growth in existing brands.
Segment-wise Performance
Tilray Brands witnessed significant growth in various segments, including cannabis, which saw a 33% increase in net revenue, totaling $63.4 million. However, distribution net revenue experienced a decline to $56.8 million, attributed to short-term challenges related to regulatory changes and infrastructure issues. Despite certain fluctuations, wellness net revenue recorded a 12% increase, amounting to $13.4 million.
Improved Financial Position
Despite facing challenges, Tilray Brands has managed to strengthen its financial position, with a liquidity of approximately $226 million, comprising $146.3 million in cash and $79.6 million in marketable securities. The company also reduced its outstanding convertible debt significantly and improved its net cash used in operating activities.
Revised Fiscal Year 2024 Guidance
Looking ahead, Tilray Brands has adjusted its fiscal year 2024 guidance, now targeting an Adjusted EBITDA of $60 million to $63 million. However, the company no longer expects to achieve positive adjusted free cash flow for the full fiscal year due to delays in cash collection from asset sales. Management emphasizes that the guidance provided is on a non-GAAP basis and excludes certain expenses and non-recurring items.
While Tilray Brands continues to demonstrate resilience and growth in key segments, the revised guidance reflects the evolving market dynamics and challenges faced by the company. Investors are advised to closely monitor Tilray Brands’ performance and strategic initiatives in navigating the rapidly changing landscape of the cannabis industry.
