CALGARY, AB - Sundial Growers Inc . (NASDAQ: NASDAQ:SNDL) reported a revenue increase in its fourth quarter results, despite falling short of analyst expectations.
The cannabis company announced a 3% year-over-year (YoY) increase in net revenue to $248.5 million for the fourth quarter of 2023, up from $240.4 million in the same quarter last year. However, this figure did not meet the consensus estimate of $263.5 million.
Following the earnings release, SNDL's stock price responded positively premarket, with a 2.61% increase.
SNDL's gross profit also saw a significant rise, reaching a record $57.3 million, or 23% of sales, for the fourth quarter, compared to $43.6 million, or 18% of sales, in the fourth quarter of the previous year. This improvement highlights the company's successful supply chain optimization strategy, including the closure of the Olds, Alberta cultivation facility in October 2023.
The company achieved positive cash flow in the second half of 2023, totaling $9.6 million, marking a considerable improvement from a negative cash flow of $84.5 million for the full year. The operating income loss for 2023 was $162.8 million, a 53% improvement from the previous year, primarily due to revenue and margin expansion.
Zach George, Chief Executive Officer of SNDL, commented on the financial success, stating, "2023 was a year of significant financial success for SNDL, including record-breaking revenue and gross profit, and the achievement of free cash flow in the second half of the year." He emphasized the company's focus on generating stabilized free cash flow and the strategic moves made throughout the year, such as the acquisition of The Valens (OTC:VLNCF) Company Inc., which have positioned SNDL for improved performance in 2024.
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