Tilray Brands, Inc. (NASDAQ:TLRY) recently released its financial results for the first quarter of fiscal 2024, revealing a larger-than-expected loss while surpassing revenue expectations outlined in the Zacks Consensus Estimate.
Over the past quarter, the company’s stock performance showed resilience, with a 41.3% increase, a notable contrast to the industry’s 17.1% downturn. Currently holding a Zacks Rank #3 (Hold), Tilray Brands’ performance has garnered significant attention.
Key Q1 Highlights
Tilray Brands disclosed a quarterly loss of 10 cents per share, surpassing the Zacks Consensus Estimate of a 5-cent loss. However, it’s important to note that the company’s performance in this regard has improved since the prior year when it reported a loss of 13 cents per share.
Total revenues painted a positive picture, rising by 15% year-over-year to reach $177 million, exceeding the consensus estimate of $175 million. Within this revenue stream, cannabis net revenues also experienced a boost, increasing by 20% to $70 million. Moreover, net cannabis revenues reached $71 million for the quarter, marking a substantial 22% rise when measured in constant currency terms. Beverage alcohol net revenues were not far behind, showing a 17% increase to $24 million. Distribution net revenues also played their part, growing by 14% to $69 million, and on a constant-currency basis, distribution revenues amounted to $67 million, representing an 11% increase from the prior-year quarter.
While the financial results showed promising revenue growth, the adjusted gross profit for the quarter stood at $49 million, with the adjusted gross margin contracting by 400 basis points to 28% when compared to the prior-year quarter.
Adjusted EBITDA for the period amounted to $11.4 million, down from $13.5 million in the prior-year quarter. This decline was primarily attributed to the absence of HEXO advisory fee revenues recorded in the previous year.
The company celebrated an annualized run-rate savings of $17.1 million, associated with the $27 million synergy plan connected to the HEXO acquisition. Tilray Brands is confident in its integration plan and sees HEXO as a successful acquisition. Additionally, the company has achieved $6.8 million in annualized run-rate savings linked to an $8 million cost reduction plan implemented in Europe.
Other Financial Aspects
At the close of the reported quarter, Tilray Brands held cash and cash equivalents of $177.5 million, net accounts receivable of $82.1 million, and stockholders’ equity totaling $3,379.4 million, not including non-controlling interest of $22.2 million.
Outlook
Management has reiterated its outlook for the fiscal year ending May 31, 2024, with adjusted EBITDA projected to be in the range of $68 million to $78 million, indicating growth in the range of 11% to 27% compared to fiscal 2023. Additionally, the company anticipates generating positive adjusted free cash flow.
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