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| And we're super excited to see that we broke even on net income |
| While it may not be obvious by looking at market caps, we continue to have the highest cannabis revenue of any Canadian company and our Q1 results once again demonstrated the strength of our brand and how we outperformed our peers |
| Income from operations was also a record and we broke even on net income, which is another huge milestone for our company and one that I'm especially proud of |
| We’re very proud of what we achieved this quarter and remain excited about the road ahead |
| And this is why I’m super proud of our performance in Q1, where we held the line on same-store sales despite industry sales being down 6% |
| As a reminder, we've expanded our Camanalytics program to also generate ad revenue, which we are already starting to see some good momentum on |
| But the good news is, like I mentioned, because of the All Together magazine, and the overall strength of our ecosystem and being the largest revenue-producing company in Canada, our data is very valuable |
| So we don't really know what will happen, but let's say if the excise tax gets better, to the extent the LPs become healthier as a result, this is also going to be good for us and the whole industry |
| But all in all, I'm very pleased at where things stand, and we're keeping a very close eye in terms of what happens with this CRA amping up the motion on excise taxes |
| As we are anticipating to add more stores to a network over the course of the year, we are excited about the revenue growth potential it'll help create |
| I think this is going to be a very, very healthy acquisition for us and a meaningful driver going forward |
| Our operating fundamentals continue to improve with each passing quarter, and our competitive position continues to strengthen while our leverage keeps improving |
| This revolutionary model tailored to our company's unique retail ecosystem has allowed us to exceed 10% market share in Q1 in the five provinces in which we operate, making us the largest retail player in the country |
| In closing, Q1 was another solid quarter for High Tide |
| We are very pleased to see Cabana Club enrollment continuing to expand and it has now grown to over 1.32 million loyal members |
| Our balance sheet continues to strengthen on the back of this free cash flow generation |
| Despite this large amount, we were still able to generate $3.6 million in free cash flow in Q1, which we feel is a very strong level |
| This cost control combined with our record revenue and highest consolidated gross margin percentage in nine quarters, all combined to produce a record adjusted EBITDA margin of 8.1% and a record level of $10.4 million |
| Our bricks and mortar stores are the core focus of the company as they represent over 90% of our total revenue and are doing even better than what our headline consolidated revenue suggests |
| Being proactive, we have been aggressively taking costs out of the system in this segment, and we have maintained positive EBITDA within our e-commerce portfolio similar to a year ago |
| I'm very proud of the team for this successful execution |
| I'm particularly proud of our consolidated adjusted EBITDA margin |
| This really shows how successful we have been taking costs out of the system, particularly on the e-commerce side while being able to meaningfully grow revenue |
| So extremely happy with that acquisition |
| Our brick-and-mortar segment posted gains led by pricing increases in our 4-walls, which offset the declines in e-commerce, where things continue to be weaker |
| On a consolidated basis, our gross margins of 28% were just ahead of the 27% we generated in Q1 last year |
| This is the strongest proof we can show that our discount club model, which often leads with very large price drops on premium accessories for members is working and gaining its team |
| I'm very proud to showcase how High Tide started off fiscal 2024 on the right foot, once again generating record revenue, record adjusted EBITDA, record income from operations, meaningful free cash flow and breakeven net income, which is a longer-term goal we have had for some time |
| Here again, our bricks and motor segment posted gains with a gross margin of 27% in Q1 2024, up from 23% in Q1 2023 |
| We once again held the line on expenses and reaped the benefits of operating leverage this quarter |
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| Our e-commerce businesses continues to lag as revenue here has declined, it weighs on our consolidated revenue growth |
| But brands have been something that I know have been frustrating for a lot of people following the sector for a while |
| This is an anomaly in the Canadian cannabis sector and our results are a source of pride |
| We came at 4.4%, lowest in dollar terms in many, many quarters, I couldn't be more happier |
| But just given the dynamics, a bit of softness in the industry, from a macro level and there's still a lot of stores in Ontario |
| It is an absolute problem in multiple areas of urban neighborhoods in Toronto and other places in Ontario |
| We are optimistic that M&A will resume this year, however, it has been slower than we would like so far, largely due to a lack of companies for sale that are quality candidates |
| We believe we have always had the guilt by association problem where the poor financial performance of larger LPs have cascaded into weaker investment sentiment for the sector overall, notwithstanding our continued excellent performance showed again this quarter |
| Incorporating the increase in our store count during the period, the average operator experienced a 14% decline while we posted a 103% gain |
| Our free cash flow was $3.6 million during the quarter, which marked a large reversal from negative $847,000 a year ago |
| And this is in line because overall, sales are down 6% nationally while we came consistent on our same-store sales level |
| In particular, I highlight that our G&A expenses were just $5.6 million in Q1, which was the lowest level in nine quarters |
| So the holiday season sales were not as robust as they usually are |
| The other problem is redundancy because we're so big and we're in so many towns and so many cities, and we have multiple stores, we love to do big block M&A |
| Do you need to see the market retrace a little bit with respect to the number of doors before you would accelerate that? I know your guide for this year is a lot less than the 90 you could open |
| And I believe the slowdown is in relation to just inflationary environment still prevailing and customers have to prioritize their spend |
| Otherwise, our average per store starts dropping |
| For example, I highlight that in this quarter, our accounts payable and accrued liabilities balance decreased by $5.4 million, which weighed meaningfully on our Q1 free cash flow |
| So I'm not worried about the fact that Ontario is hitting saturation levels |
| Despite the softness, look, we're only a product of our environment |
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