Despite Covid-19 complications, national sales growth continues for major Canadian weed retailer Fire & Flower Holdings Corp. (TSX: FAF).
On Tuesday, the Alberta-based company reported $33.1 million in revenue for the quarter ended Oct. 31, representing a 15.8 per cent sales jump from the previous quarter.
Fire & Flower says the increase in revenue was driven by opening up more retail locations during the quarter, and stronger same-store sales. The firm operates 67 stores in Canada, including 37 stores in Alberta and 21 in Ontario.
But its net loss for the quarter was $25.7 million.
Fire and flower attributed most of the loss to $53.9 million in extinguishment losses related to amended debentures and warrants held by investor Alimentation Couche-Tard Inc. (TSX: ATD.B), the owner of Circle K convenience stores.
The company, however, did manage to hit one measure of profitability for the first time.
Adjusted earnings before interest, taxes, depreciation, and amortization for the third quarter was $1.2 million. That’s better than the adjusted EBIDTA loss of $300,000 recorded in the prior quarter.
“The achievement of positive adjusted EBITDA is a significant milestone and demonstrates our continued track record of delivering on our corporate objectives,” CEO Trevor Fencott said in a statement. “We continue to work at maintaining positive adjusted EBITDA and aggressively pursue growth opportunities for the company.”
Last month, Fire & Flower acquired legacy-to-legal weed retailer Friendly Stranger, which gives the company a bigger presence in the key market of Ontario.
As Toronto and Peel regions recently went into a second lockdown, the retailer was able to pivot rapidly to curbside pickup and home delivery. It did so through its e-commerce platform called Hifyre. The company said Hifyre contributed $1.5 million in gross profit in the third quarter. Fire & Flower has been expanding its digital platform to offer market data analytics for the industry and media.
The company finished the quarter with $24.7 million in cash and cash equivalents.
Shares in Fire & Flower rose two cents to $0.90 Tuesday on the Toronto Stock Exchange.
Top image via Fire & Flower