Today, Fire & Flower Holdings Corp. released its financial and operational results for the fourth quarter and fiscal year ending December 31, 2022. The company reported an $89.5 million loss but notes it’s a turnaround year showing improved retail performance in 2022, and setting it up for a stronger 2023.
Earlier in 2022, Fire & Flower reported a $21.6 million loss in Q2, followed by an increase in revenue and profit in its third quarter. In Q4, the chain saw revenue of $30.5 million, gross profit of $7.4 million (24.3% of revenue), and a retail gross margin of 25.4%, which is an improvement from prior quarters.
In the 48-week fiscal year 2022, Fire & Flower reported revenue of $156 million and gross profit of $41.1 million (26.4% of revenue), with a net loss of $89.5 million.
A Turnaround Year
Stéphane Trudel, Chief Executive Officer of Fire & Flower, says, “2022 was a turnaround year for Fire & Flower, represented by three consecutive quarters of same store sales and gross margin growth. We look to 2023 as a transformative year where we anticipate achieving positive Adjusted EBITDA during the first half of the fiscal year through a disciplined approach to our core retail business, driving top line revenue, gross profit dollars and reducing our overhead expenses. We are delivering higher gross margin percentages with increased retail foot traffic, consumer price credibility and using our advanced Hifyre data capabilities to ensure that we have the most in-demand products for our customers.”
Loyalty Program
The chain says improvement in same-store sales and gross margin percentage is a result of their Spark Perks™ member pricing program and enhanced merchandise strategy. The loyalty program launched in mid-May 2022, driving increased traffic to stores and growth in 2022.
Delivery Business
Gross margin decreased to 24.3% in Q4 primarily due to the underperformance of the Pineapple Express delivery business. Fire & Flower acquired the country’s largest delivery and logistics company in the cannabis industry in early 2022.
Store Count
The company had 92 stores open and in operation at the end of December 31, 2022, compared to 90 stores at the end of Q3 2022 and 102 stores at the end of Q4 2021. On March 15, 2023, the company opened a new store in downtown Winnipeg. Through its Circle K co-location program, Fire & Flower has a total of seven stores.
Trudel says, “We continue to look towards consolidation in the industry and are actively pursuing opportunities that are fully accretive to our business with the long-term goal of achieving 10% market share through a high quality and profitable retail network.”
Photo courtesy of Fire & Flower