Core Insights - Tilray Brands (TLRY) achieved record net revenues of $217.5 million in Q2 of fiscal 2026, marking a 3% year-over-year increase, primarily driven by strong international operations [1][8] Financial Performance - The Distribution business was the main contributor to revenue growth, increasing by 26% year-over-year to $85.3 million, supported by competitive pricing and favorable foreign exchange impacts [1][2] - The international cannabis segment saw a significant 36% increase in Q2, prompting the company to reduce shipments to the Canadian wholesale market in favor of higher-margin international markets [2][8] - Wellness segment revenues remained flat, with growth in Hi-Ball and the Ingredient Channel offset by challenges in the club retail channel [4] Market Position and Strategy - The Beverage business faced challenges due to headwinds in the craft beer segment and ongoing portfolio optimization efforts, but the company anticipates that upcoming retailer product resets will enhance brand visibility and align product offerings with consumer preferences [3] - TLRY's stock has outperformed the industry, with a 58.4% increase over the past six months compared to a 6.5% decline in the industry [7] Valuation Metrics - TLRY is currently trading at a forward Price-to-Sales (P/S) ratio of 1.18X, which is higher than its historical median but below the industry average of 3.05X [9]

Financial Data and Key Metrics Changes - Consolidated revenue in Q3 2025 increased by 17%, driven by a 23% increase in HDMC revenue, which rose by $198 million compared to the prior year [16][20] - Consolidated operating income for Q3 was $475 million, primarily influenced by HDFS operating income, which was positively impacted by the HDFS transaction [16][22] - Earnings per share for Q3 was $3.10, with global retail down 6% [17][30] - HDFS revenue decreased by 3%, while LiveWire revenue increased by 16% [16][30] Business Line Data and Key Metrics Changes - HDMC's operating income decreased by 2% year-over-year, while LiveWire reported an operating loss of $18 million [16][30] - HDMC gross margin was 26.4%, down from 30.1% in the prior year, due to unfavorable operating leverage and increased tariffs [21][22] - HDFS's operating income increased by 472% year-over-year, driven by a lower provision for credit losses and higher other income [26][28] Market Data and Key Metrics Changes - Global retail was down 6%, with North America down 5% and international markets down 9% [17][30] - In North America, the Softail family saw a 9% increase, while Adventure Touring bikes were up 4% [18][19] - EMEA retail was down 17%, but non-core segments like Adventure Touring and Nightster motorcycles showed strong growth [19][20] - In Latin America, retail was up 16%, marking the first quarter of growth since Q3 2024 [19][20] Company Strategy and Development Direction - The company is focused on improving dealer health and profitability, with immediate actions to enhance motorcycle inventory management and introduce market-responsive promotions [5][6] - The HDFS transaction aims to transform the business into a capital-light model, unlocking $1.2 to $1.25 billion in discretionary cash [14][15] - Future strategies include enhancing product accessibility, improving speed to market, and focusing on cost and capital efficiency [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in Q3 results but highlighted the strategic value of the HDFS transaction [6][16] - The current macro environment is challenging, with high interest rates and inflation impacting consumer confidence [17][30] - Management is optimistic about future product launches and the potential to attract younger riders through new offerings [36][38] Other Important Information - The company plans to use proceeds from the HDFS transaction for debt reduction, share buybacks, and organic growth initiatives [32][31] - Total cash and cash equivalents at the end of Q3 were $1.8 billion, down $469 million from the previous year [31] Q&A Session Summary Question: Thoughts on demographic headwinds facing Harley-Davidson - Management acknowledged the need to attract younger riders and emphasized the importance of a fun and welcoming dealership experience [36][37] Question: Elaboration on market-responsive promotions - Management indicated that high dealer inventory levels necessitate promotional activities to drive sales, particularly for Touring models [39][40] Question: Impact of the HDFS transaction on operating income - Management confirmed that the transaction is expected to provide a $275-$300 million operating income benefit in the second half of the year [44][46] Question: Expectations for fourth quarter retail performance - Management noted improvements in dealer traffic but refrained from providing specific guidance due to market uncertainties [57][58] Question: Shipment expectations for 2026 - Management indicated that inventory levels are being managed carefully, with a focus on reducing Touring inventory while preparing for new model launches [52][54]

Core Insights - Reed's, Inc. reported a decline in net sales for Q2 2025, with net sales of $9.5 million compared to $11.9 million in Q2 2024, primarily due to lower order volumes from national customers [4][7] - The company experienced a significant drop in gross profit, reporting $0.8 million in Q2 2025 versus $3.8 million in the same period last year, resulting in a gross margin of 8% compared to 32% [5][8] - Management is focused on long-term growth strategies, including enhancing commercial execution, improving inventory management, and expanding distribution channels [3][7] Financial Performance - Net sales decreased to $9.5 million in Q2 2025 from $11.9 million in Q2 2024 [4][8] - Gross profit for Q2 2025 was $0.8 million, with a gross margin of 8%, impacted by $1.6 million in inventory write-offs [5][8] - Selling, general and administrative expenses rose to $5.0 million in Q2 2025 from $3.1 million in Q2 2024, driven by costs related to contract proceedings and investments in personnel and marketing [7][8] Cash Flow and Liquidity - The company used approximately $5.0 million in cash from operating activities in Q2 2025, compared to $0.9 million in the same period in 2024 [10] - As of June 30, 2025, Reed's had approximately $2.7 million in cash and $9.7 million in total debt, a decrease from $10.4 million in cash and $9.6 million in total debt at the end of 2024 [10][29] Management Strategy - The CEO emphasized the importance of rebuilding relationships with key retail partners and exploring growth opportunities in underpenetrated segments such as convenience and food service [3] - The company aims to drive sales growth within its core Reed's and Virgil's portfolios while improving margins and positioning for profitability [3][7]