Tilray Brands Inc (NASDAQ:TLRY) stock fell 8.77% (As on January 10, 11:28:38 AM UTC-4, Source: Google Finance) after the company in the second quarter of FY 24 has reported a 14% drop in second-quarter income, missing analysts’ estimates, but the cannabis company still backed its full-year guidance following strong performance at its marijuana and beverage divisions that boosted revenue to a new high. The company has trimmed its loss to $46.2 million (61.6 million Canadian dollars) in the second quarter of its 2024. Cash and cash equivalents as of Nov. 30 amounted to $143.4 million. Adjusted free cash flow for the second quarter was negative $18.4 million.
Quarterly adjusted earnings before interest, taxes, depreciation and amortization subsequently slipped to $10.1 million during the three months ended on Nov. 30, below Bloomberg consensus expectations of $13.9M. However, Tilray still posted record net revenue of $194M, an uptick of 34.4% compared to the corresponding period last year, thanks in part to strong sales of its cannabis and beverage offerings. Revenue grew across all of the Leamington, Ontario- and New York-based company’s key operating segments. Cannabis sales in the quarter ended Nov. 30 were $67.1 million, a significant jump from 2023’s same quarter cannabis sales of $49.9 million. Tilray’s distribution business experienced a revenue jump 12% year-over-year to $67.2 million in the quarter. The wellness business saw the smallest increase in sales, growing 2.2% year-over-year to $12.9 million in the quarter. Net revenue in the beverage alcohol segment more than doubled, to $46.5 million, compared to the same quarter last year, mainly through corporate acquisitions.
Meanwhile, the firm said pre-acquisition liabilities and exit costs associated with its $56 million purchase of rival Hexo Corp last year led to increased cash use. Tilray had agreed to buy Hexo last April, as it looked to take advantage of its Canadian peer’s lower valuation. Cannabis groups have seen their market caps fall sharply since 2018, weighed down in part by federal-level prohibitions on marijuana in the U.S. that have narrowed their access to capital.
The company also reiterated its full-year forecast for adjusted core profit of $68M-$78M, adding that it is on track to achieve as much as $35M in annual savings related to the Hexo deal. Tilray also said it continues to expect to generate positive adjusted free cash flow in its 2024 fiscal year.