Curaleaf Holdings (OTCMKTS:CURLF) shares plunged over 13% earlier this week after the cannabis operator reported mixed first-quarter FY2020 results.
Curaleaf misses Q1 revenue estimates
In the first quarter the company posted total revenue of around $96.5 million which is a 28% sequential quarter increase and 174% increase from the same period in 2019. The marijuana company registered a net loss of more than $15 million or $0.03 per share versus Q4 2019’s deficit of $26.6 million and a $10.2 million loss reported a year ago. The figures were disappointing missing analysts’ revenue projections of $98.41 million. Analysts had predicted a net loss of $0.05.
The company indicated that the substantial increase in revenue was a result of the opening of new dispensaries as well as other numerous acquisitions that enhanced the company’s retail outlets count. Most of Curaleaf’s revenue comes from the retail segment and at around $56.6 million this accounted for around 60% of the company’s total revenue in the quarter.
Curaleaf did not offer guidance for FY 2020. However the cannabis operator indicated that it is better positioned to improve its top-line and bottom-line this year. This is due to the company’s organic growth steps and several strategic acquisitions.
Curaleaf benefiting from acquisitions
In Q1 Curaleaf finalized the acquisition of Select pot brand and also enhanced the management team with various leadership positions. The company also opened a second recreational pot dispensary in Cape Cod, Provincetown, and also the third dispensary in Ware. The company also recently finalized the acquisition of Connecticut based Arrow with retail outlets in Milford, Stamford, and Hartford which will allow the company to be a vertically integrated operator in the state.
Mike Carlotti the CEO of Curaleaf indicated that the company’s strong performance in Q1 and its robust balance sheet which was boosted by a $300 million credit facility secured in January will help the company to be opportunistic and continue pursuing more acquisitions.