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GrowGeneration Corp. (GRWG - Free Report) reported an adjusted loss per share of 18 cents in the fourth quarter of 2023, wider than the Zacks Consensus Estimate of a loss of 12 cents. The company reported a loss per share of 25 cents in the fourth quarter of 2022.
The company had recorded a $15.7 million non-cash impairment of goodwill and intangible assets related to prior acquisitions in the quarter. Including this, the company reported an adjusted loss per share of 44 cents in the quarter under review.
GrowGeneration generated revenues of $49 million in the quarter under review, which declined 9.2% year over year, highlighting weak industry demand. The top line, however, beat the Zacks Consensus Estimate of $46 million. Comparable store sales in the quarter plunged 3.6% from the prior year.
The cost of sales declined 15.8% year over year to $38 million in the quarter. Gross profit rose 21.8% year over year to $11.6 million due to improvements in the product mix. The gross margin was 23.5% in the quarter under review compared with 17.6% in the prior-year quarter.
Store operating costs were around $12 million compared with $13 million in the prior-year quarter. Selling, general and administrative expenses were down 8.4% year over year to $8 million in the quarter under review. Adjusted EBITDA was a loss of $3.7 million in the quarter compared with the prior-year quarter’s loss of $10 million.
Financial Position
At the end of 2023, GrowGeneration had cash, cash equivalents and marketable securities of $65 million. Inventory was $65 million, and prepaid and other current assets were $8 million at 2023-end. Total current liabilities, including accounts payable, and accrued payroll and other liabilities, were $31 million at the end of 2023.
2023 Results
GrowGeneration incurred a loss per share of 76 cents in 2023, wider than the Zacks Consensus Estimate of a loss of 44 cents. The company reported a loss of $2.69 in 2022.
GrowGeneration generated revenues of $226 million in 2023, which declined 18.8% year over year but surpassed the Zacks Consensus Estimate of $222.6 million
2024 Guidance
The company expects first-quarter 2024 revenues to be $45-$48 million.
GrowGeneration anticipates revenues between $205 million and $215 million for 2024. Full-year adjusted EBITDA is expected to range between a loss of $2 million to a profit of $3 million.
Price Performance
In the past year, GrowGeneration’s shares have lost 48.6% against the industry’s 5.4% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
GrowGeneration currently has a Zacks Rank #4 (Sell).
The Zacks Consensus Estimate for Ecolab’s 2024 earnings is pegged at $6.39 per share, indicating an increase of 22.7% from the prior year’s reported number. It has an average trailing four-quarter earnings surprise of 1.7%. ECL shares have gained 41.8% in a year.
The Zacks Consensus Estimate for Carpenter Technology’s 2024 earnings is pegged at $4 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.3%. CRS shares have gained 33.5% in a year.
The Zacks Consensus Estimate for Hawkins’ fiscal 2024 earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 30.6%. The company’s shares have rallied 70% in the past year.
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GrowGeneration (GRWG) Q4 Earnings Miss, Revenues Dip Y/Y
GrowGeneration Corp. (GRWG - Free Report) reported an adjusted loss per share of 18 cents in the fourth quarter of 2023, wider than the Zacks Consensus Estimate of a loss of 12 cents. The company reported a loss per share of 25 cents in the fourth quarter of 2022.
The company had recorded a $15.7 million non-cash impairment of goodwill and intangible assets related to prior acquisitions in the quarter. Including this, the company reported an adjusted loss per share of 44 cents in the quarter under review.
GrowGeneration generated revenues of $49 million in the quarter under review, which declined 9.2% year over year, highlighting weak industry demand. The top line, however, beat the Zacks Consensus Estimate of $46 million. Comparable store sales in the quarter plunged 3.6% from the prior year.
The cost of sales declined 15.8% year over year to $38 million in the quarter. Gross profit rose 21.8% year over year to $11.6 million due to improvements in the product mix. The gross margin was 23.5% in the quarter under review compared with 17.6% in the prior-year quarter.
Store operating costs were around $12 million compared with $13 million in the prior-year quarter. Selling, general and administrative expenses were down 8.4% year over year to $8 million in the quarter under review. Adjusted EBITDA was a loss of $3.7 million in the quarter compared with the prior-year quarter’s loss of $10 million.
Financial Position
At the end of 2023, GrowGeneration had cash, cash equivalents and marketable securities of $65 million. Inventory was $65 million, and prepaid and other current assets were $8 million at 2023-end. Total current liabilities, including accounts payable, and accrued payroll and other liabilities, were $31 million at the end of 2023.
2023 Results
GrowGeneration incurred a loss per share of 76 cents in 2023, wider than the Zacks Consensus Estimate of a loss of 44 cents. The company reported a loss of $2.69 in 2022.
GrowGeneration generated revenues of $226 million in 2023, which declined 18.8% year over year but surpassed the Zacks Consensus Estimate of $222.6 million
2024 Guidance
The company expects first-quarter 2024 revenues to be $45-$48 million.
GrowGeneration anticipates revenues between $205 million and $215 million for 2024. Full-year adjusted EBITDA is expected to range between a loss of $2 million to a profit of $3 million.
Price Performance
In the past year, GrowGeneration’s shares have lost 48.6% against the industry’s 5.4% growth.
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 Ecolab Inc. (ECL - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Hawkins, Inc. (HWKN - Free Report) . ECL and CRS sport a Zacks Rank #1 (Strong Buy) at present, and HWKN has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Ecolab’s 2024 earnings is pegged at $6.39 per share, indicating an increase of 22.7% from the prior year’s reported number. It has an average trailing four-quarter earnings surprise of 1.7%. ECL shares have gained 41.8% in a year.
The Zacks Consensus Estimate for Carpenter Technology’s 2024 earnings is pegged at $4 per share. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 14.3%. CRS shares have gained 33.5% in a year.
The Zacks Consensus Estimate for Hawkins’ fiscal 2024 earnings is pegged at $3.61 per share, indicating a year-over-year rise of 26.2%. The Zacks Consensus Estimate for HWKN’s current-year earnings has been revised 4.3% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 30.6%. The company’s shares have rallied 70% in the past year.