Revenues likely declined in the fourth quarter even after the company said it would reach the high end of its projected estimates for the year.
GrowGeneration Corp. (NASDAQ: GRWG) published an update to its full-year 2023 financial outlook ahead of the company’s presentation at the retail ICR conference in Florida.
GrowGen said it now expects revenue for full-year 2023 to be at the top end of the previously communicated guidance range of $220 million to $225 million. The company also said that its adjusted EBITDA guidance for full-year 2023 remains unchanged to be between a loss of $4 million to a loss of $6 million.
“We are pleased with our efforts and progress we made company-wide in 2023 leading us to announce our expectation of revenue at the top-end of our previously communicated range, ” said Co-founder and CEO Darren Lampert. “We remain excited about our current slate of internal initiatives for 2024 and continue to prudently manage our business, focusing on creating a more nimble and efficient organization that is better-positioned for profitable growth this year and beyond.”
Third Quarter Earnings
Green Market Report wrote in November that GrowGen’s earnings revenue for the quarter ended Sept. 30 dipped 13% to $55.7 million, down from the previous quarter, underscoring the volatility in the hydroponics market. The key metric of same-store sales fell by 14.4% from the year prior. The same metric saw a 15% slump at the end of the previous quarter, an unsettling sign that could suggest a more severe slowdown in consumer spending within the niche market.
Despite the revenue dip, the firm maintained its financial forecast for the year, signaling confidence in its strategic pivot toward proprietary products and a streamlined store footprint.
At the time Lampert said, “Further in the fourth quarter, we expect to consolidate 6 additional locations where we identified cost rationalization opportunities through our ability to serve a similar customer base from a smaller footprint.”
Fourth Quarter Estimates
The first nine months of 2023 puts the company’s revenues at roughly $177 million. That means that if the company hits the top end of its projected range of $225 million, it is likely to deliver another down quarter of revenue at an estimated $48 million.
Simply Wall Street did note that In the last twelve months, the biggest single insider purchases came from Co-Founder Darren Lampert who bought $994,000 worth of shares for $2.36 per share. The stock was selling at $2.46 in early trading.
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