3 key highlights from Canopy Growth’s Q4 report

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Jun 1, 2021
  • Canopy Growth reports wider than expected loss in the fourth quarter.
  • The cannabis company's revenue falls shy of Wall Street estimates.
  • Canopy is currently about 10% down year-to-date in the stock market.

Canopy Growth Corp (TSE: WEED) said on Tuesday its revenue came in lower-than-expected in the fiscal fourth quarter. Its quarterly loss also printed high than what analysts had predicted.  

1. Financial performance

Canopy Growth reported C$700 million (£410.62 million) of loss in the quarter that concluded on 31st March versus the year-ago figure of $1.30 billion in loss. On a per-share basis, the cannabis company lost $1.85 compared to $3.72 last year.

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Canopy Growth generated C$148.4 million of revenue in Q4 that represents a 37.6% annualised growth. According to FactSet, experts had forecast the company to post an even higher C$151.4 million of revenue in the recent quarter. Their estimate of per-share loss stood at a lower 25 cents.

2. Revenue from individual business segments

The Canadian company noted C$101 million of total net cannabis revenue in the recent quarter, or a 27% increase from the previous year. At C$61.1 million, revenue from Canadian recreational cannabis jumped 39% in the fourth quarter. Canadian medical cannabis revenue, on the other hand, printed at C$74.8 million or a 30% growth on a year over year basis.

Other notable figures in Canopy Growth’s earnings report include gross margin percentage that stood at 6.6% in Q4 versus last year’s negative 85.1%. Canopy Growth had topped market estimates in the prior quarter (Q3) as well.

3. CFO Mike Lee’s remarks

Commenting on the earnings report on Tuesday, CFO Mike Lee said:

“We made tremendous progress improving our supply chain and right-sizing our manufacturing footprint, bringing supply and demand into balance. Our cost savings program is on track to deliver $150-$200 million of savings within the next 18 months, and we remain committed to our path to profitability by the end of fiscal 2022, while continuing to invest in an organisation that is focused on insights, innovation and gaining momentum in the U.S. market.”

Impact on the share price

Canopy Growth opened roughly 3% up in the stock market on Tuesday but lost the entire intraday gain in the next hour. Including the price action, it is now exchanging hands at C$29.61 per share. In comparison, the Canadian firm had started the year 2021 at a per-share price of a higher C$33.41.

Canopy Growth performed fairly upbeat in the stock market last year with an annual gain of more than 20%. At the time of writing, it is valued at C$11.55 billion.

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