Fire & Flower Holdings Corp. (OTCQX:FFLWF) (OTCQX:FFLWD) (TSX:FAF) Q2 2022 revenue was CA$40.7 million ($31.4 million), representing a decrease of 6% from CA$43.3 million in the prior year comparative period, primarily due to increasing competition from new licenses issued and pricing pressures in the cannabis retail market.
Q2 2022 Financial Highlights
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Gross profit of CA$9.7 million (24% of revenue) for Q2 fiscal 2022, compared to CA$16.2 million (37% of revenue) in the prior year comparative period. The decline in gross profit dollars and margin reflects investment in the Spark Perks Member Pricing program, Firebird Delivery and Hifyre digital platform during the current fiscal quarter.
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Adjusted EBITDA was negative CA$6.0 million compared to positive adjusted EBITDA of CA$3.1 million for the comparable quarter for 2021 fiscal year.
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Net loss of CA$21.6 million for Q2 fiscal 2022, compared to a net profit of CA$19.5 million in the prior year comparative period.
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Cash and cash equivalents balance of CA$18.6 million as at July 30, 2022, a decrease of CA$1.3 million from the fiscal year ended January 29, 2022.
Subsequent Operational Highlights Post July 30, 2022
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Announcement of change in board of directors with Suzanne Poirier, Alimentation Couche-Tard (OTCPK:ANCTF) executive joining in replacement of Guillaume Léger on August 12, 2022.
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Launch of Pineapple Express recreational cannabis delivery in the province of British Columbia on July 13, 2022.
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Changed year end to December 31.
"Fire & Flower remains focused on the transformation of our business and strategic opportunities with a goal to deliver positive adjusted EBITDA and free cash flow. We are focusing on near-term initiatives such as the Spark Perks Member Pricing program and opportunities to generate additional consolidated gross profit dollars as competitive pressures, and license expansion outpacing market growth create challenging market conditions across the industry. Our member pricing program has generated success by getting customers back in our stores and we will look to maximize the margin opportunities from all programs focused on driving gross profit dollars," stated Stéphane Trudel, CEO of Fire & Flower.
"We continue to invest in our end-to-end Hifyre cannabis consumer technology platform and integrate our wholesale and logistics segment to deliver greater sustainable value across our business as one of the leading cannabis retailers. Alongside our strategic partner, Alimentation Couche-Tard, Fire & Flower remains focused on our long term, global outlook on technology-enabled cannabis retail both through our Spark Perks member program and Firebird rapid delivery service, which brings cannabis products to consumers' doors within hours. To deliver on our long term vision, we are focused on how we sustainably grow the business while also improving on near term financial performance and prudent use of capital."
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