Published on 11 May 2022 on Zacks via Yahoo Finance
GrowGeneration (GRWG) Q1 Earnings Miss, Trims '22 Outlook
GrowGeneration Corp. GRWG reported a loss per share of 9 cents in the first quarter of 2022, wider than the Zacks Consensus Estimate of a loss of 8 cents per share. The company had reported earnings per share of 10 cents in the first quarter of 2021. The quarterly results reflect the ongoing weakness in the cannabis industry.GrowGeneration generated revenues of $81.8 million in first-quarter 2022, which declined 9% year over year, highlighting the weak industry demand. The top line missed the Zacks Consensus Estimate of $83.2 million. Comparable store sales in the quarter slumped 35.5% from the prior year at its 48 retail locations and e-commerce operations. This was somewhat negated by contributions from acquisitions.E-commerce revenues (including growgeneration.com and Agron revenues) in the quarter under review were $5.3 million, down from $6 million in the last-year quarter. Revenues from non-retail operations rose to $12.2 million in the quarter from $2.8 million last year.Cost of sales declined 8% year on year to $59.6 million in the quarter. Gross profit was down 13% year over year to $22 million. Gross margin was 27.15% in the quarter under review, a 110 basis point contraction year over year on lower net sales, fewer rebates, and increased obsolescence and shrinkage costs.Store operating costs were $14.5 million compared with $8 million in the prior-year quarter, owing to the increase in store locations. Selling, general, and administrative expenses surged 39% to around $10 million in the quarter under review, primarily attributable to the addition of non-retail operations through acquisitions. Adjusted EBITDA was a loss of $0.7 million in the quarter against the prior-year quarter’s positive $11.1 million.
Financial Position
At the end of the first quarter of 2022, GrowGeneration had cash and short-term marketable securities of $66 million. Inventory was $105.9 million, and prepaid inventory and other current assets were $7 million at the quarter-end. Total current liabilities, including accounts payable and accrued payroll and other liabilities, were $36.6 million at the quarter’s end.