Shares of Tilray Brands (TLRY) plummeted in trading on Thursday morning after the cannabis-lifestyle and consumer packaged goods company’s Fiscal Q1 2025 revenues fell below estimates. The company posted Fiscal Q1 net revenues of $200 million, an increase of 13% year-over-year. This was below analysts’ estimates of $218.8 million.
Meanwhile, the company’s EPS loss improved to $0.04 in the first quarter, compared to a loss of $0.10 per share in the same period last year. That figure was in line with analysts’ expectations.
TLRY’s Alcohol Segment Becoming a Major Contributor to Revenues
Interestingly, TLRY’s revenue increase was largely driven by its Alcohol-beverage segment, which clocked revenues of $56 million for the quarter. This result was largely fueled by recent acquisitions, leading the segment to become an increasingly important part of the business. In fact, that division’s contribution to total revenue has grown to 28% from 13% in Q1 of fiscal 2024.
On the other hand, the company’s cannabis business, once its largest segment, saw a decline in revenue. Sales dropped to $61.25 million from $70.3 million and now account for just 31% of the company’s top line, down from 40% previously.
TLRY’s Management Sees Positive Regulatory Changes for the Cannabis Industry
The company’s management, however, remains optimistic about the cannabis industry. In fact, the company’s Chairman and CEO, Irwin D. Simon commented, “We believe that there is a greater likelihood that the upcoming U.S. Presidential elections will result in improved regulatory changes in the cannabis industry, as both candidates have publicly confirmed their support for further legalization.”
Do Analysts Rate TLRY Stock a Buy?
Wall Street analysts remain cautiously optimistic about TLRY stock, with a Moderate Buy consensus rating based on two Buys and five Holds. Over the past year, shares have declined by more than 20%, and the average TLRY price target of $2.11 implies an upside potential of about 30% from current levels. Some of these ratings and price targets may change in the days following TLRY’s results.
