High Tide Reports 98% Revenue Increase for Q2
High Tide Inc. (NASDAQ: HITI), a leading retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets, filed its financial results for the second fiscal quarter of 2022 ended April 30, 2022, the highlights of which are included in this news release. The condensed interim consolidated financial statements for the three and six months ended April 30, 2022 and the accompanying management’s discussion and analysis can be accessed by visiting the Company’s website at www.hightideinc.com, and its profile pages on SEDAR at www.sedar.com, and EDGAR at www.sec.gov.
High Tide Q2 2022 – Financial Highlights:
- Revenue increased to $81.0 million in the second quarter of 2022 compared to $40.9 million in the same quarter last year. Sequentially, revenue increased by 12% compared to the previous quarter. This represents the second-highest quarterly revenue figure generated by a Canadian cannabis company reporting in Canadian dollars.
- Gross profit increased by 51% to $22.7 million in the second quarter of 2022 compared to $15.0 million in the same quarter last year.
- Gross profit margin in the three months ended April 30, 2022, was 28% compared to 32% in the previous quarter ended January 31, 2022. The drop in gross profit margin is attributed to an increased share of total revenue coming from the bricks-and-mortar retail side of the Company’s business, as a result of continued easing of pandemic restrictions across North America, and the rapid organic and inorganic bricks-and-mortar expansion in Canada.
- Adjusted EBITDA1 for the three months ended April 30, 2022, was $2.4 million compared to $3.0 million in the previous quarter ended January 31, 2022. This can be attributed to retail seasonality, as the previous quarter included the holiday season.
- Cabanalytics data sales were $5.1 million in the second quarter of 2022 compared to $2.9 million for the same quarter last year. Sequentially, Cabanalytics data sales increased by 10% compared to the previous quarter.
- For locations operational throughout the second quarter of 2022 and 2021, same-store sales increased by 23%. Since the launch of the discount club model in October of 2021, daily same-store sales have increased by 48%. The Company has continued to experience same-store sales growth since the end of the quarter.
- Geographically in the second quarter of 2022, revenue of $63.5 million was earned in Canada, $15.9 million was earned in the United States and $1.6 million was earned internationally. Compared to the second quarter of 2021, revenue increased by 81% in Canada, 181% in the United States, and 864% internationally.
- Segment-wise in the three months ended April 30, 2022, $80.0 million of revenue was generated by Retail, $1.0 million by Wholesale, and an immaterial amount by Corporate.
- Cash on hand as of April 30, 2022, totaled $15.0 million.
“Once again, I can proudly report that High Tide continues to see consistent and significant growth year-over-year and sequentially with every passing quarter, despite a persistently challenging macro environment and the state of the capital markets. Since its launch, the ongoing growth of our innovative discount club model has resulted in a 48% increase in daily same-store sales, contributing to our 98% revenue growth over the same quarter last year. While we aggressively gain retail market share in Canada ahead of our peer group, we have remained adjusted EBITDA positive for the ninth straight quarter. Although we are pleased with our EBITDA of $2.4 million this quarter, we highlight that, as the only pure-play cannabis retailer trading on Nasdaq, direct ongoing costs incurred associated with our Nasdaq listing amounted to approximately $750,000 this quarter. Our continued EBITDA positivity is a critical point for us, as we are steadily growing at the same time when many of our publicly-traded and private peers are facing fierce challenges and slowing down,” said Raj Grover, President and Chief Executive Officer of High Tide.
“We also continue to be the acquirer of choice, as many independents see compelling value in joining the High Tide family in this highly competitive retail landscape. Our recently-launched Cabana Cannabis Co. products will further contribute to healthy margin increases, since we expect our house-branded products to represent a 20-30% share of our total bricks-and-mortar sales over the long term. We are currently sitting at 126 stores across Canada, and remain confident that we will reach our goal of 150 stores by the end of the 2022 calendar year. Last quarter, we became the second-largest revenue-generating Canadian cannabis company that reports in Canadian dollars, and we are now on an annualized revenue run rate trajectory of approximately $325 million. I am lazer-focused on ensuring that High Tide’s growth trajectory will bring us to that coveted number one position in Canada. I want to give a huge shout out and thanks to the entire High Tide team for consistently producing industry-leading results,” added Mr. Grover.
High Tide Reports 98% Revenue Increase for Q2
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