Cresco Labs adds 12% most in five months after Q1 revenue beat
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Shares of Cresco Labs (OTCQX:CRLBF) jumped ~12% on Wednesday after the U.S. cannabis operator exceeded Street forecasts with its Q1 2023 revenue which stood at $194M despite a ~9% YoY decline.
The topline beat the consensus by ~$1.5M even as the net revenue fell ~3% sequentially, amid sales pressure in Illinois which, however, led to an improvement in margins, Charles Bachtell, CEO of Cresco (OTCQX:CRLBF), remarked.
The company’s net loss expanded ~18% YoY to $27.8M while gross margin reached ~44%, down from ~50% in the prior year period and cash, cash equivalents and restricted cash stood at $90.5M declining ~26% from 2022 year-end.
Meanwhile, net loss plunged ~85% from the preceding quarter when the company recognized ~$140.7M impairment loss, and its gross margin stood at ~44%.
“At Cresco Labs, we’re optimizing for the company we are today while also preparing for the industry of tomorrow,” Bachtell added.
However, the Chicago, Illinois-based multi-state operator sees brighter days ahead. The management expects margins to improve from Q2 and even more so in the second half.
The company anticipates the reduced footprint in California and improvements to automation and cultivation processes to drive 50% gross margin and 20%-plus EBITDA by the year-end, Bloomberg reported quoting Cresco’s (OTCQX:CRLBF) CFO Dennis Olis.
The management also touched on its pending acquisition of Columbia Care (OTCQX:CCHWF), the completion of which is subject to certain divestitures.
“We continue to collaborate closely with Columbia Care on the divestiture transactions required to obtain the regulatory approvals, which are conditions of closing,” CEO Bachtell added.