High Tide ( NASDAQ: HITI ) fell ~5% on Tuesday after the Canadian cannabis retailer announced Q4 2022 results, indicating an over 12-fold rise in net loss driven by one-off charges related to annual impairment testing.
The company reported C$108.2M revenue for the October quarter with ~101% YoY growth and ~14% rise sequentially, while annual revenue reached C$356.9M indicating ~97% YoY growth and yearly revenue run rate exceeded C$450M due to rising comps and retail expansion.
High Tide ( HITI ) recorded ~27% and ~33% gross margin for the quarter and full year, a decline from ~33% and ~35% in the previous year, respectively.
While total operating expenses expanded ~273% YoY to C$83.4M, the net loss jumped ~1,157% YoY to C$52.5M, driven by C$48.6M goodwill-related impairment charges, primarily reflecting headwinds in the global CBD sector.
Meanwhile, cash on hand improved to C$25.1M at the year-end, indicating a ~79% rise from the previous year.
After adding 13 new stores during the quarter to expand its retail footprint to 151 in Canada, High Tide ( HITI ) expects to open another 40 – 50 locations, mainly in Ontario, during the calendar year 2023.
Commenting on M&A prospects, Chief Executive Raj Grover noted that the company has slowed down the dealmaking activities due to macro concerns. The company is “primarily looking at smaller, highly accretive bricks-and-mortar opportunities to focus on free cash flow generation from our existing business lines,” he added.
Read: Seeking Alpha contributor Arie Investment Management noted in November that additional M&A activities are expected to further boost the company’s topline growth.
For further details see:
High Tide slips 8% as Q4 net loss widens amid one-off charges