SNDL Reports First Quarter 2025 Financial and Operational Results

Core Insights - SNDL Inc. reported record gross margin and positive cash flow for Q1 2025, driven by robust growth in its cannabis segments and strategic initiatives aimed at long-term value creation [4][6][9] - The company is undergoing a strategic review to evaluate its exposure to U.S. cannabis enterprises and its current exchange listing status, aiming to maximize shareholder value [8][27][28] Financial Performance - Net revenue for Q1 2025 was CAD 204.9 million, a 3.6% increase from CAD 197.8 million in Q1 2024, primarily due to a 16.8% growth in the combined cannabis business [6][10] - Gross profit reached CAD 56.6 million, reflecting a 12.4% increase year-over-year, with a gross margin of 27.6%, up 2.2 percentage points from the previous year [6][11] - Operating loss for the quarter was CAD 12.1 million, influenced by a CAD 4.5 million loss from the SunStream portfolio and CAD 3.0 million in restructuring charges [6][10] - Positive cash flow of CAD 2.5 million was reported, aided by the collection of CAD 28 million from Delta 9 Cannabis [6][10] Business Segments - The Liquor Retail segment generated CAD 109.5 million in revenue, a decrease of 5.7% from the previous year, while the Cannabis Retail segment saw an 8.7% increase in revenue to CAD 77.5 million [12][13][18] - Cannabis Operations reported a significant revenue increase of 53.2%, totaling CAD 34.3 million, with gross profit rising by 184.7% [12][22][25] Strategic Initiatives - The company announced the acquisition of 32 cannabis retail stores for CAD 32.2 million and launched the Rise Rewards loyalty program to enhance customer engagement [5][6] - SNDL's Board approved an amendment to its share repurchase program, allowing for the repurchase of up to 10% of the public float [6][9] Investment and Capital Structure - As of March 31, 2025, SNDL held CAD 220.9 million in unrestricted cash, providing flexibility for future investments [9][25] - The company repurchased 5.8 million common shares at an average price of USD 1.79 per share during Q1 2025 [7][25]