NEW YORK - Tilray (TSX:TLRY) (NASDAQ:TLRY) Brands, Inc. (NASDAQ:TLRY), a global pioneer in cannabis-lifestyle and consumer packaged goods, reported third-quarter financial results that fell short of Wall Street expectations. The company's adjusted loss per share for the quarter was -$0.12, which was notably lower than analysts' estimates of -$0.05. Revenue also missed the mark, coming in at $188.3 million against the consensus estimate of $198.44 million.
The third-quarter revenue reflected an impressive ~30% growth compared to the same quarter last year, with significant contributions from the beverage-alcohol segment, which soared by 165% to $54.7 million. The global cannabis net revenue also saw a robust increase of 33%, with international cannabis growing by 44% over the prior-year quarter.
Despite these gains, the stock plummeted by almost 15% in premarket trading, indicating investor disappointment over the earnings miss and the company's future financial outlook.
Tilray's updated guidance for fiscal year 2024 provided further concern. The company now anticipates an adjusted EBITDA of $60 million to $63 million, and it no longer expects to generate positive adjusted free cash flow for the full fiscal year due to delays in collecting cash from various asset sales. This revision stands in contrast to previous expectations, though specific analyst consensus figures for these metrics were not provided.
Irwin D. Simon, Tilray Brands' Chairman and CEO, commented on the quarter's performance, highlighting the company's strategic focus and operational achievements.
"We made several notable achievements during the third quarter, including growing revenue across our core business segments, increasing our adjusted gross profit, reducing our convertible debt balance, progressing the integration of our recently acquired craft beverage brands, realizing operating synergies in integrating our HEXO (NASDAQ:HEXO) acquisition, completing our Canadian and international cannabis cost reduction plans, and strengthening our balance sheet," said Simon.
Despite the positive aspects of the report, such as the reduction of net loss to $105.0 million compared to a net loss of $1.2 billion in the prior year quarter, the market's response was decidedly negative. The substantial premarket decline in Tilray's stock price reflects investor concerns over the company's ability to meet financial targets and capitalize on its strategic initiatives in the face of regulatory and market challenges.
InvestingPro Insights
Tilray Brands, Inc. (NASDAQ:TLRY) has made waves with its recent financial results, but a closer look at the InvestingPro data and tips reveals a nuanced picture of the company's performance and potential. With a market capitalization of $1.94 billion, Tilray's size in the cannabis industry is notable. The company's revenue for the last twelve months as of Q2 2024 stood at $700.5 million, showcasing a significant revenue growth of 16.26%. This growth is further accentuated by a quarterly revenue increase of 34.44% in Q2 2024. These figures underscore Tilray's ability to expand its revenue streams despite the competitive landscape.
InvestingPro Tips highlight that Tilray's stock price movements have been quite volatile, which could be a reflection of the industry's overall uncertainty and the company's earnings miss. Additionally, analysts are not expecting the company to be profitable this year, aligning with the reported adjusted loss per share for the quarter. However, it's worth noting that Tilray has demonstrated a strong return over the last month, with a 52.35% increase, and has maintained a positive trajectory over the last three months and six months, with returns of 22.75% and 27.59% respectively.
The company operates with a moderate level of debt and does not pay a dividend to shareholders, which may be of interest to investors focused on growth over income. While Tilray's P/E ratio stands at -1.23, indicating that the market is not expecting near-term earnings growth, the company's price/book ratio of 0.58 suggests that the stock may be undervalued relative to its book value.
Investors looking to dive deeper into Tilray's financial health and future prospects can find additional insights on InvestingPro, which currently lists 7 more tips for a comprehensive analysis. For those interested in accessing these valuable insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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