Proactive Investors - Tilray (TSX:TLRY) Brands Inc. saw its shares fall after it swung into the red in the second quarter and reported revenue that missed market expectations.
The global cannabis-lifestyle and consumer packaged goods company posted a loss of US$61.6 million in the three months to November 30, compared to a profit of US$5.8 million a year earlier, while net revenue fell 7%, to US$144.1 million, missing consensus forecasts of US$154.8 million.
The fall in revenue was led by its cannabis business, Tilray’s largest unit, which declined to US$49.9 million from US$58.8 million contrasting to an increase in its alcohol division to US$21.4 million from US$13.7 million.
Gross profit rose to US$40.1 million, up 22%, while adjusted gross margins were steady at 29%.
In the cannabis division, gross profit increased 37% to $18.6 million, while gross margin jumped to 37% from 23% driven mainly by cost savings.
The company said it remains in a strong financial position with $433.5 million in cash and marketable securities and has maintained its number one position in Canada with 8.3% cannabis market share.
Irwin D. Simon, chairman and chief executive officer, said: “We are close to achieving our increased annualized cost savings target of $130 million, consistent with our commitment to building a lean, efficient, and dynamic business.”
He said the group would continue to look to “seize top-line opportunities across geographies and business lines".
“In the US, this includes investing in, acquiring or building compelling and profitable lifestyle CPG brands across craft beverage-alcohol and wellness consumer products that are cannabis adjacent” he suggested.
“In Europe, we believe that we are extremely well-positioned overall in a cannabis market” he noted, while in Canada “we will be patient and strategic in building our competitive positioning amid the price compression and difficult operating conditions that we expect will, inevitably, consolidate the oversupply of licensed producers."
The group's US listed shares were changing hands 6.1% lower in afternoon trading at US$2.77.