Core Viewpoint - The market anticipates GrowGeneration (GRWG) to report flat earnings with a quarterly loss of $0.18 per share and revenues of $38.34 million, reflecting a 22.5% decline year-over-year [1][3][12] Earnings Expectations - The earnings report is scheduled for March 13, 2025, and could influence stock movement based on whether actual results exceed or fall short of expectations [2] - The consensus EPS estimate has been revised down by 18.18% over the last 30 days, indicating a bearish sentiment among analysts [4] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for GrowGeneration is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.86% [10][11] - A positive Earnings ESP is generally a strong predictor of an earnings beat, especially when combined with a favorable Zacks Rank [8] Historical Performance - GrowGeneration has not been able to meet consensus EPS estimates in the last four quarters, with a significant surprise of -72.73% in the most recent quarter [12][13] - The company is currently rated with a Zacks Rank of 3, which complicates the prediction of an earnings beat [11] Conclusion - Overall, GrowGeneration does not appear to be a strong candidate for an earnings beat, and investors should consider additional factors before making investment decisions [16]

Financial Results - GrowGeneration Corp. announced preliminary financial results for the fiscal year ended December 31, 2024[5]. - The press release detailing these results was issued on February 6, 2025[6]. - The report does not include specific financial figures or performance metrics in the provided content[7]. - No specific guidance or future outlook was provided in the available content[7]. Company Information - The company is listed on the NASDAQ under the trading symbol GRWG[4]. - The company is not classified as an emerging growth company[4]. - The report was signed by CEO Darren Lampert[12]. Documentation - The press release is attached as Exhibit 99.1 to the Current Report on Form 8-K[8]. - The financial statements and exhibits are not deemed "filed" under the Securities Exchange Act[7]. Product and Market Activity - There are no mentions of new products, technologies, market expansion, or acquisitions in the provided documents[7].

Industry Overview - Marijuana stock investors experienced a slight increase in trading this week, driven by potential changes in the cannabis industry and a push for better regulations for legal operators [1] - The performance of cannabis companies has not always aligned with their trading success, indicating volatility in the market [2] - There is potential for short-term trading opportunities as the industry has been in a downtrend, and any chance to take profits is seen as a win [3] Companies to Watch - **GrowGeneration Corp.** operates retail hydroponic and organic gardening stores in the U.S. and recently launched three new premium product lines in grow lighting, essential accessories, and mediums for indoor growing and greenhouse hydroponics [4][5] - **The Scotts Miracle-Gro Company** manufactures and markets products for lawn, garden care, and indoor gardening, reporting Q1 2025 sales of $416.8 million, a slight increase from $410.4 million in the prior year [8][11] - **Jushi Holdings Inc.** is a vertically integrated cannabis company involved in cultivation, processing, retail, and distribution for medical and adult-use markets, with Q3 2024 financial highlights showing total revenue of $61.6 million and a net loss of $16.0 million [12][15]

Investment Group Overview - Alan has been running the investing group 420 Investor since 2013, focusing on publicly-traded cannabis stocks [1] - The group moved to Seeking Alpha in 2023 and closely covers 23 stocks [1] - Features include 2 model portfolios, 10 weekly videos with chart analysis, 3 weekly summary pieces, a monthly newsletter, and a chat for questions [1] - A sub-service called The Big Picture helps investors stay updated on the cannabis sector [1] Professional Background - Alan Brochstein, CFA, is one of the first investment professionals to focus exclusively on the cannabis industry [2] - He started his career in the securities industry in 1986 and managed investments in institutional environments [2] - Founded AB Analytical Services in 2007 to provide independent consulting to registered investment advisors [2] - Managing partner of New Cannabis Ventures, a leading provider of financial information in the cannabis industry since 2015 [2]

Industry Overview - The cannabis industry is experiencing growth, with increasing interest in investment opportunities despite challenges in achieving consistent profits due to political factors and market momentum [1][2] - Long-term strategies are being adopted by investors, with hopes for better cannabis reform to stabilize trading momentum [2] - Innovation within the cannabis sector is seen as a key driver for future investment potential, with ongoing progress being made [3] Company Highlights - **GrowGeneration Corp. (NASDAQ:GRWG)**: The company operates retail hydroponic and organic gardening stores in the U.S. and is launching new product lines to enhance profitability and meet customer demands [4][7] - **Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM)**: The company reported Q3 2024 earnings with net sales of $44.0 million, a decrease from $54.2 million the previous year. However, gross profit margin improved to 19.4% from 6.1%, and net loss decreased to $13.1 million from $19.9 million [10] - **The Scotts Miracle-Gro Company (NYSE:SMG)**: For Q3 2024, the company reported net sales of $414.7 million, an 11% increase from $374.5 million a year ago, although the Hawthorne segment saw a significant sales decrease of 46% [12]

Group 1 - Alan Brochstein is a pioneer in the cannabis investment sector, starting his career in the securities industry in 1986 and founding AB Analytical Services in 2007 to provide consulting for investment advisors [1] - He has been managing the investing group 420 Investor since 2013, which focuses on publicly-traded cannabis stocks and moved to Seeking Alpha in 2023 [2] - The 420 Investor group covers 23 stocks, providing investment news, earnings report previews, and post-report analyses, along with model portfolios, weekly videos, summaries, and a monthly newsletter [2] Group 2 - The Big Picture is a sub-service of 420 Investor designed to keep investors updated on the cannabis sector [2]

Core Insights - GrowGeneration Corp. reported a loss per share of 19 cents in Q3 2024, which is wider than the Zacks Consensus Estimate of a loss of 11 cents and compared to a loss of 12 cents in Q3 2023 [1] - The company generated revenues of $50 million in Q3 2024, a decline of 10.1% year over year due to 25 fewer retail locations, but exceeded the consensus estimate of $48.9 million [1] - Comparable store sales improved by 12.5% year over year in the quarter [1] Financial Performance - Cost of sales decreased by 0.5% year over year to $39 million, while gross profit fell by 32.9% to $11 million, resulting in a gross margin of 21.6%, down from 29.1% in the prior year [3] - Selling, general and administrative expenses declined by 2.4% to $7.4 million, and total operating expenses fell by 5.4% year over year to $23 million [4] - Adjusted EBITDA was negative $2.4 million in Q3 2024, compared to negative $0.9 million in the prior year [4] Cash Position - At the end of Q3 2024, the company had cash and cash equivalents of $27 million, down from $30 million at the end of 2023 [5] - Inventory stood at $48 million, with prepaid inventory and other current assets totaling $7.7 million [5] - Total current liabilities were $24.5 million at the quarter's end [5] Guidance - The company expects revenues to be between $190 million and $195 million for the full year 2024 [6] Stock Performance - Over the past year, GrowGeneration shares have decreased by 20.8%, while the industry has seen a growth of 2.9% [7]

Financial Data and Key Metrics Changes - The company reported net revenue of $50 million for Q3 2024, down from $55.7 million in the same period last year, representing a decline of 10.2% primarily due to 25 store closures in the trailing 12 months [20] - Same-store sales grew by 12.5%, marking the first quarter of positive same-store sales in three years [13][20] - Gross profit margin decreased to 21.6% from 29.1% year-over-year, impacted by inventory costs and store liquidation sales [22] Business Line Data and Key Metrics Changes - Proprietary brand sales increased to 23.8% of cultivation and gardening sales, up from 19.4% in the previous year, driven by new product launches [14][21] - Net sales of commercial fixtures within the storage solutions segment increased by 12.9% to $8.6 million compared to $7.6 million in the prior year [22] Market Data and Key Metrics Changes - The company observed continued improvements in its business within Michigan, Oregon, and California markets, while facing challenges in Oklahoma [21] - The percentage of consumable product net sales in the cultivation and gardening segment remained stable at 73% compared to the prior year [22] Company Strategy and Development Direction - The company is focused on operational efficiency, enhancing product offerings, and positioning for sustainable growth towards 2025, with an emphasis on high-margin proprietary brands and digital expansion [8][9] - The restructuring plan includes closing 19 stores to prioritize best-performing locations and aims to add approximately 50 new proprietary products over the next 12 months [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the industry, noting challenges in raising capital and legislative hurdles, but remains committed to long-term profitability and growth [54][56] - The company reiterated its full-year 2024 revenue guidance of $190 million to $195 million and expects to provide guidance for 2025 in the next earnings call [17][26] Other Important Information - The company has a solid cash position of $55.2 million with no debt as of September 30, 2024, and repurchased $1.8 million of stock during the quarter [16][26] - The B2B e-commerce portal is set to launch in Q4 2024, aimed at enhancing customer experience and operational efficiency [15][46] Q&A Session Summary Question: Store rationalization and future closures - The company currently operates 31 stores, down from about 65, and may close a few more stores next year as it builds out distribution and B2B networks [32] Question: Performance of new proprietary brands - The company has seen both customer adoption of new products and sales into distribution, with proprietary brands expected to drive higher margins [34] Question: Building out the commercial business - There is significant opportunity in the commercial sector, with the company providing a range of services to make it easier for customers to shop and manage their operations [37][39] Question: Drivers of proprietary brand sales growth - Growth is driven by both new products and existing SKUs, with expectations to reach 35% of sales from proprietary brands in 2025 [41] Question: B2B portal's impact on margins - The B2B portal is expected to enhance margins through cost savings and improved inventory management, with proprietary brands contributing to higher margins [49]

GrowGeneration (GRWG) came out with a quarterly loss of $0.19 per share versus the Zacks Consensus Estimate of a loss of $0.11. This compares to loss of $0.12 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -72.73%. A quarter ago, it was expected that this company would post a loss of $0.08 per share when it actually produced a loss of $0.10, delivering a surprise of -25%.Over the last four quarters, the company has not been a ...

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