Tilray Brands Posts Sequential Revenue Decline In Q1 2024 After Alcohol Segment Decline

Tilray Brands (TSX: TLRY) this morning reported its first quarter financial results for FY 2024. The company described the results as having “record Q1 net revenues,” despite posting a sequential decline in topline revenues compared to the fourth quarter of 2023.

Revenues came in at $177 million for the three month period ended August 31, 2023, a 3.9% decline over the $184 million reported in the fourth quarter. The figure however reflected 15% year over year growth, a reflection of recent acquisition completed by Tilray.

The decline in sales is largely attributed to the firms beverage alcohol segment, which saw sales declined from $32.4 million to $24.2 million, a 25.4% decline, which was partially offset by the cannabis segment which improved by 9.2% to $70.3 million. The improvement in the cannabis segment is largely attributed to the closing of the acquisition of Hexo Corp during the quarter, as well as Truss Beverage Co. The company earlier this week meanwhile closed the purchase of eight beer and beverage brands from Anheuser-Busch, which is expected to boost revenues in the second quarter.

Following the transactions, Tilray claims it has the leading market share in the Canadian cannabis markets, while now places fifth in the craft beer brewing market in the US.

Gross profits also took a tumble during the quarter, falling 34% on a sequential basis, dropping from $67.2 million to $44.2 million, a result of prior fees from Hexo no longer being collected following the closing of that acquisition. Gross margins overall declined to 25% of revenue, down from 36% in Q4 2023.

READ: Kerrisdale Targets Tilray In Short Report: “Structurally Unprofitable”

After operating expenses of $78.6 million, Tilray overall posted a net loss of $55.9 million for the first quarter, an improvement over the $119.8 million net loss recorded in Q4, the latter of which was impacted by certain fair value changes. Adjusted EBITDA meanwhile came in at $11.4 million, down from $22 million in the fourth quarter.

Looking ahead, Tilray reiterated its adjusted EBITDA target for 2024 of $68 to $78 million, reflecting growth of up to 27% over the prior year. The company is also forecasting positive adjusted free cash flow.

Tilray Brands last traded at $3.09 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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