Tilray (TSE: TLRY) reported higher sales and swung to profit in the second quarter of 2022, taking advantage of the strong demand for its products.
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Tilray is a global cannabis lifestyle and consumer packaged products company with operations in Canada, the United States, Europe, Australia, and Latin America.
Sales & Earnings
Net revenue came in at $155 million for the quarter ended November 30, an increase of 20% from $129 million in the prior-year quarter. The increase is due to a 7% growth in cannabis revenue to $58.8 million, net alcoholic beverage revenue of $13.7 million from SweetWater and wellness segment revenue of $13.8 million from Manitoba Harvest.
Adjusted EBITDA increased from $10.1 million to $13.8 million. Net income increased to $6 million from a net loss of $89 million in the previous year’s quarter.
The cannabis operator had a cash balance of $331.8 million at the end of the quarter.
Management Commentary
Tilray chairman and CEO Irwin D. Simon said, “Looking at performance highlights across key markets, we maintained our #1 cannabis market share position in Canada – despite market saturation and related competitive challenges — on the strength of our brands and adept pricing and marketing adjustments. Importantly, we believe these adjustments will enable us to aggressively recapture share when the market right-sizes. In Germany – Europe’s largest and most profitable medical cannabis market – our nearly 20% share leads the market. We believe this, coupled with our infrastructure, will also allow us to capture the adult-use market as legalization accelerates under the new coalition government.”
New Parent Name
The company also announced a new parent name, Tilray Brands, Inc., reflecting the company’s evolution from a Canadian LP to a global consumer packaged goods powerhouse with a market-leading portfolio of cannabis and lifestyle CPG brands.
Wall Street’s Take
On January 7, CIBC analyst John Zamparo kept a Hold rating TLRY and set a price target of C$8. This implies 1.6% downside potential.
Overall, consensus on the Street is that TLRY is a Hold based on one Buy, five Holds, and one Sell.
The average Tilray price target of C$13.30 implies 63.6% upside potential to current levels.
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