Today, Fire & Flower Holdings Corp. reported increases in revenue and profit in its third quarter ended October 29, 2022 compared to its second quarter.
Fire & Flower also announced an agreement to acquire two retail cannabis stores from Alimentation Couche-Tard in Kingston, Ontario, and noted the opening of a total of five high-traffic Circle K co-located stores in the Greater Toronto Area under license agreements.
“I am excited to see that our team’s hard work and focus on operations is demonstrating measurable operational and financial results at the end of the third quarter as well as in the recent weeks,” says Stéphane Trudel, Chief Executive Officer of Fire & Flower in the release. “The Company continues to be focused on driving the goal of positive Adjusted EBITDA and Free Cash Flow. We aim to accomplish our goal through a disciplined approach to driving topline revenue, gross profit dollars, and reducing selling, general and administrative expenses.”
Retail revenue for the third-quarter 2022 decreased 2% to $33.0 million from $33.7 million in the prior year comparative period. Despite a reduction of two stores, retail revenue for the Company grew $2.6 million (9%) quarter-over-quarter.
Spark Perks™ Member Pricing
The Company attributes this growth to the Spark Perks™ Member Pricing program. The program launched in mid-May 2022, which drove increased traffic to stores. There was an increase of 15% in average annualized sales per store compared to Q2 2022 as a result. However, due to the investment in launching this program, retail gross profit for Q3 2022 was $8.0 million, compared to $10.2 million for the prior year’s comparative period. Fire & Flower’s retail segment’s gross profit dollars and margin percentage is improving following the quarter end, due to the increased number of transactions and units sold per store.
Revenue & Profit Up over Q2
Fire & Flower announced revenue of $43.8 million for Q3 2022, an increase of 8% from the previous quarter, and a decrease of 3% in the prior year. The company’s gross profit was $11.8 million for Q3 2022, compared to $9.7 million in Q2 2022, and $15.7 million in the prior year comparative period.
Store Numbers Changing
In total, Fire & Flower had 90 stores open and in operation at the end of October 29, 2022. This represents two fewer stores than the prior quarter and seven fewer stores for the same comparative period for 2021.
Subsequent to the Q3 2022 results, Fire & Flower announced the expansion of the Alimentation Couche-Tard strategic relationship by adding four additional cannabis retail store locations, and its expansion throughout Western Canada with the opening of a cannabis retail store in Kelowna, BC, and another store in Winnipeg, Manitoba.