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Canada cannabis producer Village Farms' Q3 sales beat on higher exports

By Reuters News


Overview

  • Canada cannabis producer's Q3 sales rose, beating analyst expectations

  • Net income for Q3 was $10 mln, with adjusted EBITDA at $18.2 mln

  • Gross margin declined due to softer Canadian wholesale pricing


Outlook

  • Company expects Delta 2 expansion to reach full capacity by mid-2027, boosting output

  • Netherlands facility seen contributing to stronger sales growth in Q4 and through 2027

  • Company anticipates normalization of Canadian wholesale trim market conditions in Q4


Result Drivers

  • RECORD CANNABIS SALES - Co said Q3 results were driven by record cannabis revenues of $55 mln, with about 43% from international markets

  • INTERNATIONAL EXPORT GROWTH - International export sales rose 75% year-over-year to $20.8 mln, maintaining prior quarter's record, with resilient pricing in compliant supply chains

  • CANADIAN WHOLESALE PRESSURE - Gross margin decline attributed mainly to a softer spot trim market in the Canadian wholesale sales channel


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Sales

Beat

$67 mln

$64.37 mln (3 Analysts)

Q3 Net Income

$10 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the healthcare facilities & services peer group is "buy"

  • Wall Street's median 12-month price target for Village Farms International Inc is $5.00, about 73.6% above its November 6 closing price of $2.88

  • The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 8 three months ago


Reuters Recommended Reads

  • Nov 6 - Canada's Canopy Growth Q2 revenue rises 22%, but slightly misses estimates

  • Nov 6 - Canada's Enbridge Q3 EBITDA rises on higher gas transmission, distribution rates

  • Nov 6 - Canada's Constellation Software Q3 revenue slightly beats estimates on acquisitions


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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