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7 Key Takeaways From Fire & Flower’s Earnings Report

Apr 6, 2023 • 9:05 AM EDT
5 MIN READ  •  By Michael Berger
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Last week, Fire & Flower Holdings Corp. (TSX: FAF) (OTCQX: FFLWF) reported fourth quarter financial and operational results for the period that ended on December 31, 2022.

So far, the market’s response to the earnings report has not been favorable and we are not surprised by the reaction. During the last year, several high-profile cannabis companies have exited the cannabis retail sector.

Although these exits have created opportunities for companies like Fire & Flower to capture additional market share, the story has advanced slower-than-expected. Today, we will highlight 5 key takeaways from Fire & Flower’s earnings report and want our readers to be aware of the numbers.

  1. The cannabis retail company announced the achievement of three consecutive quarters of year-over-year same store sales
  2. During the quarter (only 9 weeks), Fire & Flower generated $30.5 million of revenue and $7.4 million of gross profit
  3. Year-over-year same-store sales increased by 3.9%, representing significant sequential improvements from previous quarters and sustaining the trend into early 2023
  4. Fire & Flower reported to have benefited from its Spark Perks™ member pricing program and enhanced merchandise strategy
  5. Adjusted EBITDA was negative $3.8 million which included restructuring, integration related costs, and other one-time charges
  6. For 2023, Fire & Flower anticipates annualized savings of $6 million in sales, goods and administrative (SG&A) as well as lease expenses and anticipates achieving positive adjusted EBITDA during the first half of the fiscal year
  7. As of December 31st, Fire & Flower reported to have $12.4 million of cash on hand

Although Fire & Flower has reported some improvements when compared to the prior quarter, the stock has been trending to the downside. For the last year (or longer), the entire Canadian cannabis retail sector has been under heavy pressure and we will monitor how the company continues to be impacted by this.

If you are interested in learning more about Fire & Flower, please send an email to support@technical420.comwith the subject “Fire & Flower’s Earnings Report” to be added to our distribution list.

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Any Content posted regarding a Profiled Issuer is not a solicitation or recommendation to buy, sell or hold securities. We cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. All information should be independently verified. We are not responsible for errors or omissions in our publications, and any opinions expressed are subject to change, without notice. We do not, nor are we under any obligation to undertake due diligence or investigation or authenticate and verify whatsoever regarding Profiled Issuers or any Content posted in relation thereto and we do not receive any verification from the Profiled Issuer regarding the Content we disseminate. Similarly, while we endeavor to facilitate the provision of quality information, we are not responsible for any loss or damages caused or alleged to have been caused by its use nor verify or authenticate or update such information.

This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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