Ontario-based cannabis producer Canopy Growth Corporation (TSE: WEED) (NASDAQ: CGC) saw revenue fall 25 per cent year-over-year as the company shifts its focus toward premium cannabis.
On Friday, the company announced its financial results for the fourth quarter and fiscal year ended March 31.
Canopy reported net revenue of $112 million in Q4 FY2022, a 25 per cent decrease from $148.4 million during the same quarter last year.
Cannabis revenue of $66 million during the quarter represented a decline of 35 per cent, while other consumer products including vapes, sports drinks and protein powders accounted for $46 million in revenue, a 3 per cent decline year-over-year.
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The company’s reported gross margin in Q4 FY2022 was minus 142 per cent, compared to 7 per cent during the same period a year earlier.
Canopy attributed the change in gross margin to restructuring charges totaling $10 million, combined with lower production output and price compression, as well as higher third-party shipping, distribution and warehousing costs.
Net loss during the quarter totalled $579 million, compared to net loss of $616 million during Q4 FY2021.
The company’s adjusted EBITDA resulted in a loss of $122 million — 30 per cent higher compared to $94 million during the same period a year earlier — due to decreased sales and a decline in gross margins.
Canopy’s cash and short-term investments totalled $1.4 billion as of March 31, a decrease of $0.9 billion from $2.3 billion a year earlier.
“Canopy Growth is building the industry’s leading portfolio of premium brands across North America,” Canopy CEO David Klein said in a statement. “In the fiscal year ahead, we will remain focused on growing our market share in the key segments that will drive profitable growth and continuing to scale our premium brands across North America.”
Canopy reported net revenue of $520 million for the 2022 fiscal year, a 5 per cent decrease from the previous year.
Cannabis accounted for $337 million in revenue in FY2022, an 11 per cent decline, while other consumer products increased 9 per cent year-over-year to $183 million.
The company’s reported gross margin during the 2022 fiscal year was minus 37 per cent, compared to 12 per cent during the previous year, while adjusted EBITDA totalled a loss of $415 million, 22 per cent higher than FY2021.
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Canopy recently announced a cost reduction strategy to make cannabis cultivation more affordable and enhance supply chain efficiency by retooling facilities, reviewing procurement strategies, and reducing third-party professional and office fees.
The company said that it expects to generate COGS savings of up to $50 million, and selling, general and administrative expense reductions of up to $100 million within 12 to 18 months.
In April, the company laid off 245 people, reducing its workforce by approximately 8 per cent to cut down operating costs and increase profitability.
“Achieving profitability is critical and we have undertaken additional initiatives to streamline and drive efficiencies for our global cannabis business,” Canopy CFO Judy Hong said. “In FY2023, we are focused on executing our path to profitability in Canada, while we continue to invest in high potential opportunities.”
Company stock was up more than 5 per cent Tuesday to $6.37 on the Toronto Stock Exchange.