Cresco Labs Reports Second Quarter 2023 Results
Year-of-the-Core initiatives delivered strong improvements in gross margin, adjusted EBITDA and operating cash flow
CHICAGO–(BUSINESS WIRE)–Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) (“Cresco Labs” or the “Company”), the industry leader in branded cannabis products with a portfolio of America’s most popular brands and the operator of Sunnyside dispensaries, today released its financial and operating results for the second quarter ended June 30, 2023. All financial information presented in this release is reported in accordance with U.S. GAAP and in U.S. dollars, unless otherwise indicated, and is available on the Company’s investor website, here.
Second Quarter 2023 Financial Highlights
- Second quarter revenue of $198 million, up 2% sequentially, driven by retail growth of 4% and flat wholesale revenue.
- Gross profit of $87 million, 44% of revenue.
- Adjusted gross profit¹ of $93 million and Adjusted gross margin of 47%, up 100 bps from the first quarter.
- Adjusted SG&A¹ reduction of $7 million sequentially.
- Adjusted EBITDA¹ of $40 million, up 38% sequentially as margin improved 540 bps to 20%.
- Generated positive operating cash flow of $18 million, inclusive of $14 million of one-time cash charges related to facility closures, severance payments and M&A related fees.
- Second quarter net loss of $43 million, which includes $22 million of impairment charges.
Operating Highlights
- Retained the No. 1 share position in Illinois, Pennsylvania and Massachusetts.
- Maintained the industry’s No. 1 bestselling portfolio of branded flower and branded concentrates, No. 3 portfolio of branded vapes, and No. 4 portfolio of branded edibles².
- Branded equivalized unit volume of 18 million, up 19% year-over-year².
- Retail transactions of 1.3 million, an 11% increase year-over-year.
- Opened five total Sunnyside stores in Florida and Pennsylvania, bringing the nationwide store count to 68 as of June 30, 2023.
¹See “Non-GAAP Financial Measures” at the end of this press release for more information regarding the Company’s use of non-GAAP financial measures.
²According to BDSA
Management Commentary
Our Year-of-the-Core commitment to rationalizing and optimizing our core markets, core stores, core brands and core products is reflected in our Q2 results with growth in our top line, gross margin, Adjusted EBITDA and operating cash flow. With our focus on driving scale and efficiencies across the entire organization, we’ve been accomplishing more with less – leading to a 38% sequential improvement in Adjusted EBITDA.
Charles Bachtell, CEO of Cresco Labs
We maintained our industry leadership with the #1 portfolio of both branded flower and branded concentrates, #3 portfolio of branded vapes and #4 portfolio of branded edibles². We’re pleased to see improved profitability and cash flow in our core markets, which positions us well for the capital-efficient growth and expansion opportunities that lie ahead. Our results are just starting to reflect the decisions we made earlier this year to support our Year-of-the-Core priorities, with much more to come.
