Financial Data and Key Metrics Changes - SNDL reported net revenue of $245 million for Q2 2025, reflecting a 7.3% increase year over year [8] - Gross profit reached $67.6 million, a 16.2% growth year over year, matching the record gross margin of 27.6% achieved in Q1 2025 [9] - Adjusted operating income was $5.8 million, marking a 226% increase year over year, with the first positive operating income in the company's history [10] Business Segment Data and Key Metrics Changes - The cannabis retail segment achieved net revenue of $84.4 million, representing 11% year over year growth, driven by an 8.2% increase in same store sales [16] - The liquor retail segment delivered net revenue of $141.9 million, marking a 1% year over year increase, supported by a 2.7% growth in same store sales [14] - Cannabis operations segment reported net revenue of $35.8 million, reflecting a 43% growth compared to the prior year, driven by edibles and international sales [17] Market Data and Key Metrics Changes - The cannabis business expanded at nearly three times the rate of the Canadian recreational market, outperforming direct competitors [4] - International sales for cannabis amounted to $3.8 million in Q2 2025, indicating growth in export revenues [48] Company Strategy and Development Direction - The company focuses on three strategic pillars: growth, profitability, and people, with a commitment to expanding its cannabis retail footprint in Canada [19][20] - SNDL is actively monitoring the U.S. market while expanding its international presence, serving patients in the UK and Continental Europe [6] - The company aims to achieve sustainable long-term value for shareholders through operational improvements and cost management [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth and operational efficiency, despite challenges in the broader market [5][21] - The company is optimistic about international sales growth, although it will be off a slow base [29] - Management highlighted the importance of maintaining a strong balance sheet with no debt and over $200 million in unrestricted cash [6] Other Important Information - The company achieved a $5 million reduction in overhead expenses year over year, despite inflationary pressures [22] - The Rise Rewards loyalty program is in early stages, with a six-figure membership count [30] Q&A Session Summary Question: International sales growth and domestic sales prioritization - Management indicated that international sales growth does not detract from focus on the Canadian market and expects meaningful growth in the second half of the year [29] Question: Update on the Rise Rewards loyalty program - Management confirmed progress in member sign-ups, with announcements planned as key milestones are reached [30] Question: Potential expansion of cultivation footprint - Management noted that current cultivation efforts meet about 15% of total biomass needs and are cautious about capital investments in new facilities [32] Question: Satisfaction with current supply chain and margins - Management acknowledged early days in Europe with high margins but noted volatility and external shocks affecting supply chains [38] Question: Commentary on liquor segment growth - Management attributed liquor segment growth to effective banner management and consumer engagement, particularly in the Wine and Beyond banner [44] Question: Clarification on wholesale revenue for cannabis - Management disclosed that international sales for cannabis amounted to $3.8 million in Q2 2025 [48] Question: Aspirations for market share in Canadian recreational sales - Management expressed a focus on profitable growth rather than solely increasing market share, acknowledging the oligopolistic nature of the market [51] Question: Update on U.S. assets and consolidation - Management indicated that consolidation of U.S. assets is pending the resolution of ongoing legal processes [53] Question: Management's role in Parallel operations - Management clarified that SNDL is not engaged in plant-touching activities in the U.S. to maintain compliance with NASDAQ [57]

Core Insights - The traditional liquor store channel has been a core part of the liquor industry, but it is facing significant challenges due to reduced consumption scenarios and the emergence of new retail formats [1] - Liquor store owners are experiencing severe competition and internal market pressure, leading to low profit margins and a struggle to retain customers [3][5] Market Conditions - Liquor stores are experiencing a decline in customer traffic, with some stores reporting as little as one customer in half an hour [6][9] - There is a notable shift in consumer behavior, with many opting for lower-priced liquor options, leading to a decrease in sales of higher-end products [7] Competition and Pricing - The market is characterized by severe product homogeneity, with many stores selling similar well-known brands, resulting in price wars and reduced profit margins [3][10] - New entrants in the market are engaging in zero-profit sales to attract customers, exacerbating the competitive landscape [5] Impact of E-commerce - Online retail is significantly impacting brick-and-mortar liquor stores, with many consumers preferring the convenience and lower prices offered by e-commerce platforms [10][11] - Wholesale markets are also beginning to sell directly to consumers at wholesale prices, further diminishing the competitive edge of traditional liquor stores [10] Future Directions - Experts suggest that liquor stores need to innovate and diversify their offerings to survive, including expanding into convenience goods, upgrading store formats, and creating cultural experience venues [14][15] - Some liquor stores are already adapting by enhancing their store environments and adding complementary services, such as food and ticket sales, to improve customer experience and retention [14][15]

Financial Data and Key Metrics Changes - Net revenue for Q1 2025 reached CAD 205 million, a 3.6% increase compared to Q1 2024, driven by a combined cannabis business growth of 16.8% [12][16] - Gross profit increased by CAD 6.2 million or 12.4% year over year, resulting in a gross margin improvement to 27.6% [12][13] - Free cash flow was marginally negative at CAD -1.1 million, representing a CAD 5.3 million improvement compared to the same period in 2024 [13][15] Business Line Data and Key Metrics Changes - Liquor Retail segment recorded net revenue of CAD 109.5 million, reflecting a 5.7% decline year over year, impacted by one less day in February and Easter timing [16][17] - Cannabis Retail achieved net revenue of CAD 77.5 million, an 8.7% increase compared to the prior year, driven by a 5.2% increase in same-store sales [17][18] - Cannabis Operations segment reported net revenue of CAD 34.3 million, a 53% growth compared to the prior year, including CAD 10.2 million from the Indiva acquisition [19][20] Market Data and Key Metrics Changes - The cannabis segments continued to show strong momentum, achieving steady year-on-year revenue gains for the thirteenth consecutive quarter [4][5] - The company gained 0.3 percentage points of year-on-year market share in the cannabis retail segment [21][22] Company Strategy and Development Direction - The company is focused on three strategic pillars: growth, profitability, and people, with a commitment to expanding its cannabis retail footprint [21][25] - A formal strategic review has been initiated to evaluate the company's exposure to U.S. multistate licensed cannabis enterprises and current exchange listing status [6][9] - The acquisition of One Centimeters is expected to close by the end of Q3 2025, enhancing the company's retail presence [22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding potential excise tax reforms in Canada but does not expect material changes in the near term [46][47] - The company is not experiencing material disruptions from trade disputes, with only 5% of liquor sales coming from U.S. products [49][50] Other Important Information - The restructuring program is on track, delivering CAD 4 million in savings during Q1, corresponding to an annualized run rate of CAD 17 million [24][25] - The company is committed to investing in employee development and enhancing engagement through various initiatives [25][26] Q&A Session Summary Question: Strategy for entering the U.S. market - Management clarified that no decision has been made regarding entering the U.S. market, but existing capital exposure could facilitate entry [31][32] Question: M&A outlook for cannabis retail - Management confirmed active evaluation of both organic and inorganic growth opportunities in the Canadian retail network [35][36] Question: Rollout of loyalty program in retail - The loyalty program aims to enhance communication with consumers and provide value, with potential expansion across different product lines [40][41] Question: Insights on regulatory recommendations post-elections - Management expressed cautious optimism about regulatory reforms but does not expect significant changes in excise tax rates soon [46][47]

Financial Data and Key Metrics Changes - The company reported record full year net revenue of $920 million, a 1.3% increase compared to the prior year [14] - Q4 2024 net revenue reached a record $257.7 million, a 3.7% increase year-over-year [11] - Gross profit for the full year was $240 million, reflecting a 26% growth compared to the prior year [14] - Q4 gross profit was $68.8 million, a 20% increase year-over-year, resulting in a gross margin of 26.7% [12] - Free cash flow for the full year was positive at $8.9 million, representing a $70 million improvement compared to 2023 [16] Business Line Data and Key Metrics Changes - The cannabis segment achieved a combined business growth of 16.5%, driven by the Indiva acquisition [11] - Liquor segment revenue was impacted by a market slowdown, with a decline of 3.4% in Q4 compared to the same period last year [21] - Cannabis retail reported Q4 net revenue of $83.2 million, a 10.7% increase year-over-year, and full year revenue of $311.7 million, a 7.5% growth [22][23] - Cannabis operations segment net revenue reached $37.1 million in Q4, with a 42% growth compared to the prior year [25] Market Data and Key Metrics Changes - The liquor retail segment faced a decline in same-store sales, with expectations for flat revenue in 2025 [42] - The cannabis market is experiencing strong momentum, with the company gaining market share and expanding distribution points [28][30] Company Strategy and Development Direction - The company is focused on long-term growth through strategic initiatives, including the acquisition of Endiva, positioning it as the largest manufacturer of infused edibles in Canada [7][29] - The company plans to continue building its infrastructure in Canada while exploring opportunities in core US markets [49] - The company aims to achieve $100 million in annualized free cash flow within the next three years [38] Management's Comments on Operating Environment and Future Outlook - Management noted a slowdown in liquor sales across North America, with expectations for a flat revenue outlook in 2025 [42] - The company remains optimistic about the long-term potential of its US investments despite current operational challenges [48] - Management emphasized the importance of operational improvements and cost efficiencies to drive future profitability [32] Other Important Information - The company ended the year with $218 million in unrestricted cash and zero outstanding debt, providing a competitive advantage for capital allocation [8] - The company announced its application for listing on the Canadian Stock Exchange, which will provide additional flexibility for growth [7] Q&A Session Summary Question: Outlook for liquor retail segment given weak same-store sales - Management acknowledged a slowdown in liquor sales across North America and anticipates flat revenue for 2025, with a long-term growth rate of 1-1.5% expected [42][44] Question: Performance of US investments and potential need for additional capital - Management indicated that while there are operational challenges, they see opportunities for improvement and are focused on capital deployment in Canada and core US markets [48][49] Question: Rationale behind CSE listing application - Management stated that the listing creates optionality for future growth, but emphasized that they are not currently positioned to engage in plant-touching activities [53]