High Tide Inc. (Nasdaq: HITI) (TSXV: HITI) (FSE: 2LYA) continued to raise the bar on sales growth, posting a year-over-year sales gain of 64%, while pivoting to address shifting market conditions.
The company reported financial results for its fiscal first quarter ended Jan. 31.
Overall revenue increased to C$118.1 million (US$85.8 million) in the period, compared to $72.2 million for the same period a year ago. Same-store sales increased 52% year-over-year, indicating strong organic growth across the organization.
Despite the positive revenue trend, High Tide continues to operate in the red, recording a net loss of C$3.9 million for the quarter. However, that represents a sharp improvement over the prior-year period, which came in with a net loss of C$7.4 million.
“While some of our peers have flatlined in revenue or struggled with maintaining margins, our results indicate that our company has succeeded in managing our exponential growth and driving consistent margins,” Raj Grover, president and CEO, said in a statement.
“While a further deterioration of the broader cannabis capital markets has occurred, we’ve remained focused on operating a fundamentally strong organization with strategic and attainable goals for growth,” Grover continued.
High Tide reported gross profit of C$32.2 million, a year-over-year increase of 40% and a sequential increase of 9%. Gross profit margin for the quarter was 27%, consistent with the previous three quarters.
The Canadian cannabis provider reported cash on hand of C$23.7 million as of Jan. 31.
In addition to sharing the quarterly financial results, High Tide’s chief announced a shift in its overall strategy to focus on generating free cash flow from operations.
“We believe this is not only something that current market conditions demand but that doing so will mitigate risks as we navigate through uncertainty and give our shareholders an advantage,” Grover said.
With this shift, High Tide will move away from its previously stated objective of opening 40-50 new stores in 2023 toward focusing on internal and existing store growth, the company said.
“Beyond slowing our expenditures in acquisitions, and rapid build-out of organic locations, we have taken steps to add internal systems that strengthen our operations from a financial standpoint, which includes recently launching a company-wide project, supported by outside consultants, aimed at maximizing the integration of our various business units and systems in order to optimize productivity and output,” Grover added.