Tilray Brands Shares Soar On Fiscal 2024 Growth, Driven by Diversification and Acquisitions
Tilray Brands (TSX: TLRY) has announced its financial results for the fourth quarter and fiscal year ending May 31, 2024. The company reported substantial growth across its various business segments, marking a significant achievement in its diversification strategy.
In the fourth quarter, Tilray’s net revenue surged 25% to $229.9 million, up from $184.2 million in the same period last year. Gross profit also rose significantly to $82.4 million, reflecting a strong performance in both the beverage-alcohol and cannabis segments.
CEO Irwin D. Simon stated, “Tilray Brands is leading the convergence of cannabis, beverages, and wellness on a global scale. In Fiscal 2024, the Company achieved remarkable growth across its businesses, with a 26% increase in net revenue over the prior year, record-breaking performance in gross profit and adjusted EBITDA, and generated positive adjusted free cash flow for the fiscal year.”
Tilray’s shares jumped more than 12% on the day following the news.
Tilray’s performance was bolstered by three key acquisitions: eight iconic craft brands from Anheuser-Busch Companies, LLC, HEXO Corp., and Truss Beverage Co. These strategic moves have fortified Tilray’s brand portfolio, strengthened operations, and positioned the company as a leader in various markets.
“In the U.S., Tilray Beverages is the 5th largest craft brewer and Tilray Wellness is the leader in hemp products. In Canada, Tilray Cannabis holds the #1 recreational cannabis market share, while in Europe, it is the market leader in medical cannabis,” Simon highlighted.
The beverage-alcohol segment saw a 137% increase in net revenue to $76.7 million in Q4, driven by new product innovations and contributions from acquired brands. Gross profit in this segment soared 146% to $40.8 million. Meanwhile, cannabis net revenue grew 12% to $71.9 million, partly due to the acquisitions of HEXO and Truss.
Despite these gains, the cannabis segment faced challenges, with gross profit and adjusted gross profit decreasing to $28.8 million, compared to $39.5 million in the prior year quarter. This decline was largely attributed to the completion of the HEXO advisory services agreement.
For the full fiscal year, Tilray reported a 26% increase in net revenue to $788.9 million. The beverage-alcohol segment continued its upward trajectory with a 113% increase in net revenue to $202.1 million. Cannabis net revenue also rose by 24% to $272.8 million, supported by international market growth and strategic acquisitions.
Tilray successfully reduced its net convertible debt by approximately $300 million and surpassed its cost-savings synergy target. This financial maneuver has significantly strengthened the company’s balance sheet, allowing for continued strategic investments and growth initiatives.
Following the earnings report, Tilray’s stock experienced a notable increase. According to Stocktwits, “$TLRY just reported earnings and shares are getting higher (pun intended). Revenue of $229.8M vs $227.3M estimates and EPS of -$0.04 vs -$0.02 estimates. Stock is up 9.8% after-hours.”
David Brown, a market analyst, commented on the company’s earnings call, noting, “Interesting tidbit in Tilray’s Q4 call today, saying that pricing in the wholesale market is increasing as it’s becoming harder to find wholesale products. While increased closures add to the glut, overall this is a good trend for growers getting squeezed on price.”
Tilray last traded at $2.81 on the TSX.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
