Tilray Brands Reports Lower Cannabis Sales In Q3, Trims 2025 Revenue Outlook

Tilray Brands, Inc’s. TLRY third-quarter net revenue decreased from $188.3 million to $185.8 million, missing the consensus of $210.45 million.

Net revenue increased to ~$193 million on a constant currency basis. The prior-year quarter included revenue of $6 million of now-discontinued SKUs. Strategic initiatives and SKU rationalization impacted revenue by $13.2 million in the current year quarter.

The cannabis company reported a breakeven in adjusted EPS ($0.00) compared to a consensus loss of 4 cents.

Also Read: What’s Going On With Tilray Brands Stock Today?

Gross profit increased by 5% to $52.0 million compared to $49.4 million in the prior year quarter. Gross margin increased 200 bps to 28% in the third quarter compared to 26% in the prior year quarter.

Adjusted EBITDA was $9.0 million compared to $10.2 million in the prior year quarter due to the beverage segment’s SKU rationalization impact of $1.0 million and $0.6 million related to the prioritization of international cannabis markets.

Beverage alcohol net revenue increased to $55.9 million, up from $54.7 million in the prior year.

Cannabis’ net revenue was $54.3 million compared to $63.4 million in the prior year quarter. On a constant currency basis, Cannabis net revenue was $57.5 million.

The strategic initiative to redirect product from Canada to international markets resulted in a timing impact on revenue of $3.2 million.
Additionally, a strategic decision to pause presence in margin dilutive categories, such as vapes and infused pre-rolls, led to a revenue decrease of $4.0 million but prevented a potential loss exceeding $3 million.

Distribution net revenue increased 8% to $61.5 million. It was up 15% to $65.1 million on a constant currency basis.

Wellness net revenue increased 5% to $14.1 million and 8% on a constant currency basis to $14.5 million.

Tariff Update: Tilray concluded that tariffs should not impact sales.

In the U.S., Tilray’s American beverage brands are solely manufactured and distributed within the U.S. market.
In Canada, Tilray’s cannabis brands are produced domestically for Canadian consumers.
In Europe, Tilray manufactures medical cannabis brands and products for distribution across Europe and Australia.
Regarding Tilray’s wellness business, Manitoba Harvest is exempted from the new tariffs.

Tilray reduced outstanding total debt by $71 million. As a result, net debt to trailing twelve months EBITDA is less than 1.0x

Guidance: Tilray Brands revised its fiscal year 2025 net revenue guidance to $850 million to $900 million from prior guidance of $950 million-$1 billion.

The company said adjustments for constant currency and the impacts of the strategic initiatives and SKU rationalization, which total approximately $50 million, would have resulted in an expected net revenue of $900 million to $950 million.

Price Action: TLRY stock is up 0.12% at $0.58 during the premarket session at the last check on Tuesday.

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