Cannabis: One Stock to Play the Movement SNDL (NASDAQ:SNDL) reported lower second-quarter revenue and gross profit as demand weakness across liquor and cannabis markets, cannabis-production ramp-up costs and promotional activity weighed on results.
The company said it continued to generate positive operating cash flow and improved free cash flow year over year, while accelerating share repurchases and advancing a restructuring involving U.S. cannabis operator Parallel
Net revenue for the quarter ended June 30 fell 3.7% from a year earlier to C$235.8 million. Gross profit declined 16.6% to C$56.3 million, while gross margin contracted 3.7 percentage points to 23.9%. – Will This New Development Mean A Big Rally In Cannabis Stocks? SNDL recorded an operating loss of C$7.8 million and an adjusted operating loss of C$7 million.
Chief Financial Officer Alberto Paredero-Quiros said the results reflected lower revenue and gross profit, costs associated with new cannabis-product production ramp-up, weaker liquor retail performance and a C$2.3 million reduction in the value of its SunStream investment. Free cash flow was negative C$6.7 million, compared with negative C$7.9 million in the prior-year period. Paredero-Quiros said the year-over-year improvement was supported by working-capital changes and rent-expense timing, though the quarter also included a C$6.9 million annual payment tied to 2025 management incentives and a C$2.7 million increase in cash in transit.