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Cannabis retailer SNDL Q3 revenue falls on product mix shift

By Reuters News


Overview

  • Canada cannabis and liquor retailer's Q3 revenue fell 2.5% yr/yr to C$238 mln

  • Gross profit and gross margin declined due to weak Cannabis Operations performance

  • Adjusted operating income turned positive, improving from a loss last year


Outlook

  • Company expects cost reduction actions to benefit results starting in Q4 2026

  • SNDL is conducting a strategic review of Cannabis Operations to improve financial performance

  • Company expects Value Buds franchise network to resume growth in Ontario after regulatory resolution


Result Drivers

  • PRODUCT MIX SHIFT - Co said revenue decline in Cannabis Operations was mainly due to exit from unprofitable dried flower category and increased focus on higher-value products

  • COST REDUCTIONS - Co said it reduced manufacturing costs and operating expenses, including workforce cuts at Kelowna facility

  • PROMOTIONAL SPEND AND EXPENSES - Co attributed lower Liquor Retail operating income to increased promotional support and higher expenses from new store openings


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

C$238 mln


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

  • Wall Street's median 12-month price target for SNDL Inc is C$4.22, about 141.2% above its October 26 closing price of C$1.75


Reuters Recommended Reads

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  • Oct 26 - Canada's PrairieSky Royalty Q3 funds from operations up 42%


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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