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Canopy Growth posts wider-than-expected loss but revenue tops estimates

Economy, Finance

Canopy Growth Corp. posted a wider-than-expected loss for its fiscal third quarter Tuesday, but revenue that beat estimates, causing its stock to fall then recover in premarket trade. Smith Falls, Ontario-based Canopy posted a net loss of C$829 million ($650.9 million), or C$2.43 a share, for the quarter to Dec. 31, wider than the loss of C$109.6 million, or 26 cents a share, posted in the year-earlier period. The FactSet consensus was for a loss of 32 cents a share. Revenue net of excise taxes rose to C152.5 million from C$123.8 million, above the FactSet consensus of C$149.8 million. “We are executing against our cost savings program, with several initiatives already completed and more underway to build a leaner and more agile business,” Chief Financial Officer Mike Lee said in a statement. “These cost savings, along with our top-line growth and continued cost discipline, puts Canopy firmly on a path to achieve profitability during Fiscal 2022, with further improvement anticipated beyond.” Net cannabis revenue came to C$99 million, boosted by an increase in Canadian recreational and international medical sales. Growth was also boosted by an increase in sales of S&B vapes, This Works health and wellness products and demand for the company’s U.S. CBD products and consumer packaged goods under the BioSteel sports nutrition brand acquired in 2019. The net loss was driven by impairment and restructuring charges. Shares were up 2% premarket and have gained 123% in the last 12 months, while the Cannabis ETF has gained 93% and the S&P 500 has gained 18%.

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