Canadian cannabis producer Canopy Growth (CGC) - Get Report on Tuesday posted fiscal third-quarter revenue that beat analysts’ forecasts amid a recovery in demand for pot and pot-infused drink and vape products, even as it generated a wider per-share loss.
Canopy Growth reported a fiscal third-quarter net loss of C$829 million (US$651.1 million), or C$2.43 a share, vs. a loss of C$109.6 million, or C$0.26 a share in the same period a year ago. Adjusted earnings before interest, taxes, depreciation and amortization were a negative C$68 million vs. a negative C$97 million a year ago.
Sales, however, rose 23% to a record C$153 million, driven by an increase in Canadian recreational and international medical cannabis sales as well as stronger sales of vaporizers, and health and wellness products, the company said.
Overall cannabis revenue rose 9% to C$99 million from C$90.4 million. Revenue from other products, services and distribution agreements gained 61% to C$53.7 million from C$33.4 million.
“We delivered another quarter of record net revenue, with growth across all our businesses, led by improved commercial and supply chain execution,” CEO David Klein said, adding that the company continues to accelerate its U.S. growth strategy “… with the momentum building behind the promising cannabis reform in the U.S.”
Canopy Growth took a particularly strong hit early into the coronavirus pandemic amid a lack of demand for pot itself as well as uncertainty about the future direction of U.S. cannabis legalization.
However, ongoing cost savings as well as top-line growth and continued cost discipline, “… puts Canopy firmly on a path to achieve profitability during fiscal 2022, with further improvement anticipated beyond,” Chief Financial Officer Mike Lee said in the statement.
Sales of Martha Stewart-branded CBD health and wellness products continue to drive U.S. sales. Canopy Growth has secured distribution of Martha Stewart CBD collection in 580+ Vitamin Shoppe and Super Supplements retail locations nationwide.
Canopy Growth expects continued growth from its recently launched line of CBD pet products under the Martha Stewart CBD and SurityPro CBD brands.
Shares of Canopy Growth were up 5.3% at $46.20 in trading in New York.