Q4 2024 High Tide Inc Earnings Call Transcript
Key Points
- High Tide Inc (HITI) achieved record-breaking revenue of $522.3 million for the fiscal year, marking a 7% increase compared to fiscal 2023.
- The company added 29 new stores in 2024, more than doubling the number added in 2023, with plans to add another 20 to 30 locations in 2025.
- High Tide Inc (HITI) has delivered positive free cash flow for six consecutive quarters, with a significant increase of 217% over fiscal 2023.
- The Cabana Club membership numbers reached new highs in Canada with 1.72 million members, showing an 11% sequential increase and 34% growth year-over-year.
- The acquisition of a majority stake in Purecan, a profitable German medical cannabis importer, is expected to strengthen High Tide Inc (HITI)'s position in the fast-growing German market.
- Despite the revenue growth, adjusted EBITDA was down 1% year-over-year and 14% sequentially, reflecting the impact of new store openings.
- Consolidated gross margins slightly declined to 26% in Q4 2024, compared to 27% in Q3, due to strategic pricing to drive volumes.
- The Canadian cannabis market remains highly competitive, with pressures from the illicit market and a slowdown in industry sales.
- Salaries and wages as a percentage of revenue increased to 12.4% in Q4, reflecting the rapid pace of store growth and the need for upfront investments in new locations.
- The e-commerce segment accounted for only 5.6% of consolidated revenue in Q4, with anticipated lower gross margins as part of the global Cabana Club rollout strategy.
Good morning. My name is Sylvie, and I will be your conference operator today. (Operator Instructions) You may begin your conference.
Thank you, Sylvie. Good morning, everyone, and welcome to High Tide, Inc.'s quarterly earnings call. Please note that all earnings discussed on this call are presented on an unaudited basis. Joining me on the call today are Mr. Raj Grover, President and Chief Executive Officer; and Mr. Mayank Mahajan, Chief Financial Officer.
On January 29, 2025, the company released audited financial and operational results for the fiscal year that ended October 31, 2024. Before we begin, please let me remind you that during the course of this conference call, High Tide's management may make statements, including with respect to management's expectations or estimates of future performance.
All such statements other than statements of historical facts constitute forward-looking information or forward-looking statements within the meaning of the applicable securities laws and are based on assumptions
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