SNDL stock gains as cannabis retail drives Q3 growth (NASDAQ:SNDL)


Canadian Licensed Producer SNDL (NASDAQ:SNDL) added ~9% pre-market Monday after its Q3 2022 results indicated over 16-fold rise in net revenue for the period driven by the outperformance of the company’s cannabis retail segment. (All financial data are in Canadian dollars)

Net revenue for the period grew ~3% sequentially and expanded ~1,501% YoY to $233.7M as Cannabis Retail segment brought $66.2M with a 985% YoY increase from the prior year quarter thanks mainly to the Nova Cannabis acquisition and Value Buds sales.

However, the largest segment, Liquor Retail, added $152.5M to the net revenue with ~1% YoY growth, while Cannabis Operations brought $11.8M with ~49% YoY growth.

Adjusted EBITDA for the period grew ~74% YoY as the adj. EBITDA loss in the Cannabis Operations segment narrowed to $0.6M from $3.4M in Q3 2021.

While gross margin climbed to a record $50.3M, the net cash from operating activities stood at $8.6M compared to $56.2M and $17.9M loss in Q3 2021 and the preceding quarter, respectively.

For Q3 2022, SNDL (SNDL) reported $98.8M in net loss compared to $16.7M in net income in the prior year’s quarter, mainly due to non-cash charges.

“As a result of our team’s focus on operational execution and sustainable profitability, we delivered record revenue and cash flow from operations in the third quarter,” Chief Executive Zach George said ahead of the earnings call at 10:30 a.m. EST.

Read: Seeking Alpha contributor Cannabis Growth Investor argued in a recent bullish thesis on the company that SNDL’s (SNDL) cannabis operations indicate a negative value.

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