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GrowGeneration Corp. (GRWG - Free Report) reported a loss per share of 12 cents in the third quarter of 2023, missing the Zacks Consensus Estimate of a loss of 11 cents per share. The company had reported a loss per share of 12 cents in the third quarter of 2022.
GrowGeneration generated revenues of $55.7 million in third-quarter 2023, which declined 21% year over year. The top line surpassed the consensus estimate of $55 million.
Comparable store sales in the quarter declined 14.4% from the prior year at its 55 retail locations. Retail sales were down 13.6% year over year to $41.4 million in the quarter. E-commerce revenues in the quarter under review were $2.8 million, down from $3.1 million in the last year quarter. Revenues from non-retail operations were $11.5 million in the quarter, down from $19.8 million last year.
The cost of sales declined 25% year on year to $39.5 million in the quarter. The gross profit was down 12% year over year to $16 million. The gross margin was 29.1% in the quarter under review compared with 25.9% reported in the prior-year quarter. The improvement was driven by increased private label sales growth, pricing expansion and margin accretion from the development of GRWG’s distribution network and corresponding bulk-buy negotiations.
Store operating costs were $12 million compared with $13.6 million in the prior-year quarter. Selling, general and administrative expenses fell 14% to around $7.6 million in the quarter under review.
Adjusted EBITDA was a loss of $0.9 million in the quarter compared with the prior-year quarter’s loss of $2.7 million.
Financial Position
At the end of the third quarter of 2023, GrowGeneration had cash and short-term marketable securities of $66.6 million. Inventory was $76 million, and prepaid inventory and other current assets were $12.4 million at the quarter end. Total current liabilities, including accounts payable and accrued payroll and other liabilities, were $40.5 million at the quarter’s end.
2023 Guidance
GrowGeneration expects revenues between $220 million and $225 million in 2023. Full-year adjusted EBITDA is expected at a loss of $4 million to $6 million.
Price Performance
In the past year, GrowGeneration’s shares have plunged 67.3% against the industry’s 0.9% dip.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
GrowGeneration currently has a Zacks Rank #4 (Sell).
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.3%. The Zacks Consensus Estimate for CRS’ fiscal 2024 earnings is pegged at $3.57 per share. The consensus estimate for 2024 earnings has moved 3% north in the past 60 days. Its shares have gained 65% in a year’s time. Universal Stainless & Alloy Products has an average trailing four-quarter earnings surprise of 44.4%. The Zacks Consensus Estimate for USAP’s 2023 earnings is pegged at 27 cents per share. Earnings estimates have been unchanged in the past 60 days. USAP’s shares gained 96% in the last year.
The consensus estimate for ANDE's current-year earnings has been revised 3.3% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. ANDE shares have rallied around 32% in a year.
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GrowGeneration (GRWG) Q3 Earnings Miss, Revenues Dip Y/Y
GrowGeneration Corp. (GRWG - Free Report) reported a loss per share of 12 cents in the third quarter of 2023, missing the Zacks Consensus Estimate of a loss of 11 cents per share. The company had reported a loss per share of 12 cents in the third quarter of 2022.
GrowGeneration generated revenues of $55.7 million in third-quarter 2023, which declined 21% year over year. The top line surpassed the consensus estimate of $55 million.
Comparable store sales in the quarter declined 14.4% from the prior year at its 55 retail locations. Retail sales were down 13.6% year over year to $41.4 million in the quarter. E-commerce revenues in the quarter under review were $2.8 million, down from $3.1 million in the last year quarter. Revenues from non-retail operations were $11.5 million in the quarter, down from $19.8 million last year.
The cost of sales declined 25% year on year to $39.5 million in the quarter. The gross profit was down 12% year over year to $16 million. The gross margin was 29.1% in the quarter under review compared with 25.9% reported in the prior-year quarter. The improvement was driven by increased private label sales growth, pricing expansion and margin accretion from the development of GRWG’s distribution network and corresponding bulk-buy negotiations.
Store operating costs were $12 million compared with $13.6 million in the prior-year quarter. Selling, general and administrative expenses fell 14% to around $7.6 million in the quarter under review.
Adjusted EBITDA was a loss of $0.9 million in the quarter compared with the prior-year quarter’s loss of $2.7 million.
Financial Position
At the end of the third quarter of 2023, GrowGeneration had cash and short-term marketable securities of $66.6 million. Inventory was $76 million, and prepaid inventory and other current assets were $12.4 million at the quarter end. Total current liabilities, including accounts payable and accrued payroll and other liabilities, were $40.5 million at the quarter’s end.
2023 Guidance
GrowGeneration expects revenues between $220 million and $225 million in 2023. Full-year adjusted EBITDA is expected at a loss of $4 million to $6 million.
Price Performance
In the past year, GrowGeneration’s shares have plunged 67.3% against the industry’s 0.9% dip.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
GrowGeneration currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , Universal Stainless & Alloy Products, Inc. (USAP - Free Report) and The Andersons Inc. (ANDE - Free Report) . Each of these stocks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.3%. The Zacks Consensus Estimate for CRS’ fiscal 2024 earnings is pegged at $3.57 per share. The consensus estimate for 2024 earnings has moved 3% north in the past 60 days. Its shares have gained 65% in a year’s time.
Universal Stainless & Alloy Products has an average trailing four-quarter earnings surprise of 44.4%. The Zacks Consensus Estimate for USAP’s 2023 earnings is pegged at 27 cents per share. Earnings estimates have been unchanged in the past 60 days. USAP’s shares gained 96% in the last year.
The consensus estimate for ANDE's current-year earnings has been revised 3.3% upward over the past 60 days. Andersons beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average. ANDE shares have rallied around 32% in a year.