CALGARY - High Tide Inc. (NASDAQ:HITI) (TSXV:HITI) reported first quarter fiscal 2025 results that fell short of expectations, sending shares down 13.4% in trading.
The cannabis retailer posted revenue of $142.5 million for the quarter ended January 31, 2025, up 11% YoY and 3% sequentially. However, the company reported a net loss of $0.03 per share, compared to breakeven results in the prior year period.
Adjusted EBITDA declined 32% YoY to $7.1 million, which the company attributed to accelerated store openings and a new loyalty program strategy impacting margins in its e-commerce segment.
Same store sales increased 5% YoY, representing the fastest growth pace in four quarters. The company’s Cabana Club loyalty program in Canada now exceeds 1.76 million members, with ELITE memberships growing 153% YoY to over 81,000.
"I am pleased to report yet another quarter featuring record revenue. This continued momentum is supported by our core Canadian bricks-and-mortar business which is generating double digit growth," said CEO Raj Grover.
However, Grover acknowledged the lower EBITDA, stating it was due to a "purposeful shift in our strategy to win market share in our ancillary business lines, which will provide long-term benefits by expanding our Cabana Club globally."
High Tide opened 5 new Canna Cabana retail locations during the quarter, bringing its total store count to 194 in Canada. The company aims to add 20-30 more locations in calendar 2025 while generating positive free cash flow.
The stock move suggests investors were disappointed by the earnings miss and declining profitability metrics despite top-line growth. High Tide will need to demonstrate its new strategy can drive improved bottom-line results going forward.
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