MedMen Enterprises Inc. reported its fiscal first quarter financial report and despite a big jump in revenues, the company still missed expectations.
It was this past Tuesday that the American cannabis company reported that revenue rose 105% in the quarter. Revenue grew from $21.5 million a year ago to $44 million. Analysts per FactSet had been expecting sales of $47.9 million.
MedMen reported a net loss of $31.5 million, which amounts to 16 cents a share, versus $12.5 million, or 27 cents a share in the year-ago quarter.
“We entered Fiscal 2020 on a mission to build a more nimble and financially flexible MedMen,” Chief Executive Adam Bierman said in a statement.
“As we right-size our organization and implement an intensified focus on free cash flow generation, our business will become more efficient, in turn allowing us to better serve our stakeholders.”
Not long ago MedMen announced that it would be laying off roughly 20% of its employee base which should achieve $10 million in annual cost savings.
CEO Adam Bierman said on the earnings call, “Moving forward, our focus will be on our core markets, particularly California, the most important cannabis market in the world. In the first quarter of 2020, retail revenues across our 13 California retail locations totaled $30 million up 51% year-over-year and 9% sequentially. During the quarter we closed the acquisition of a flagship retail location at Long Beach and launched our delivery program in the state. With over 400 products now delivered in California, MedMen Delivery is the most robust delivery program of its kind.”
He added, “In Nevada, we also brought delivery service to our customers in Q1, launching same day delivery in September. Residents of Southern Nevada can now access roughly 300 products as well as enjoy MedMen’s unparalleled retail experience from the convenience of their residences. In Illinois, we also eagerly await the transition to recreational sales, which is slated to begin on January 1, 2020. Illinois is projected to be a $2 billion recreational cannabis market at maturity. And with our premier Chicago location in Oak Park, this legislation bodes well for MedMen in Illinois.”
He further said, “The transfer of the Evanston store which we received through the PharmaCann merger termination is anticipated to close by mid December. Beyond investing in our core retail markets, we will continue to develop our first of a kind delivery platform. Once delivery is fully ramped in all of our core geographies we will be able to serve over 50% of our total addressable market across the U.S. Although we are still gathering preliminary analytics on our nascent program, we are proud to report that we have already surpassed $6 million in annualized delivery sales within three months of launching, and are seeing average basket sizes from delivery customers greater than the average basket size we report from in-store sales.”
The stock is down about 83% this year so far.