GrowGeneration Q3 Earnings: Revenue Drops Slightly to $70.9M, Gross Profit Margins Rise – GrowGeneration (NASDAQ: GRWG)

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Grow Generation Corp. (NASDAQ: GRWG), the largest chain of specialty hydroponic and organic garden centers with 58 locations in 15 states, released its financial results Monday evening for the third quarter ended September 30, 2022.

Third Quarter 2022 Highlights

  • Net sales decreased 39% to $70.9 million, due to weaker industry demand
  • Comparable store sales for the quarter decreased 58.1%
  • Net loss of $7.2 million compared to net profit of $4.0 million last year
  • Loss per share of $0.12 during the quarter
  • Loss of adjusted EBITDA of $2.6 million
  • Revenue forecast for 2022 updated to range between $270m and $280m, an improvement from the previous range of $250m to $275m
  • Adjusted EBITDA guidance updated to range between a loss of $10 million and $13 million, an improvement from the previous range of a loss of $12 million to $15 million
  • Cash and cash equivalents were $71.1 million as of September 30, 2022

“I am proud of the resilience of our team throughout this year as GrowGen – and the entire hydroponics category – faced significant industry and economic headwinds. In the third quarter of 2022, net sales of $70.9 million exceeded our internal expectations, driven primarily by stronger than expected demand within our distribution and private label businesses,” Darren Lampertsaid the co-founder and CEO of GrowGeneration.

Q3 2022 consolidated results

Revenue decreased $45.2 million, or 38.9%, to $70.9 million for the quarter ended September 30, 2022, compared to $116.0 million for the quarter ended on September 30, 2021. The decline in net revenue is attributable to lower comparable store sales. of 58.1% in 57 stores and the Company’s e-commerce operations opened in the third quarter of 2022 compared to the same period last year, partially offset by the addition of a new store and the contribution acquisitions. Overall retail sales were $47.9 million in the third quarter, compared to $100.8 million for the same period last year.

E-commerce revenue was $3.1 million in the third quarter, compared to $10.5 million for the same period last year.

Revenue from non-commercial activities, including distributed brands and MMI, was $19.8 million in the third quarter of 2022, compared to $4.7 million in the same quarter last year.

Gross profit was $18.3 million for the third quarter of 2022, compared to $34.1 million for the third quarter of 2021. Gross profit margin was 25.9% compared to 29.4% in the same quarter last year.

Photo: Company logo

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