Q3 2024 High Tide Inc Earnings Call Transcript
Key Points
- High Tide Inc (HITI) reported a record-breaking quarter with revenue up 6% sequentially to $131.7 million.
- The company has been free cash flow positive for five consecutive quarters, generating $2.1 million in Q3 and $21.8 million over the trailing four quarters.
- High Tide Inc (HITI) achieved a 12% market share, up from 10% a year ago, and is on track to reach its goal of 15% market share in the provinces where it operates.
- The Cabana Club membership grew to 1.55 million members, up 8% sequentially and 41% year-over-year, with the ELITE paid membership tier growing 30% sequentially and 203% year-over-year.
- The company reported a net income of $800,000 in Q3, continuing its upward momentum from previous quarters.
- Consolidated gross margins decreased to 27% in Q3 2024 from 28% in the previous quarter and the same quarter last year.
- Salaries and wages increased in Q3 due to the pace of store growth, impacting overall expenses.
- Adjusted EBITDA was down 4% sequentially, attributed to the heightened pace of store growth and the ramp-up period required for new stores.
- The e-commerce segment experienced a revenue decline, impacted by inflationary pressures and a tough market environment.
- The resurgence of the illicit market has led to increased competition, particularly in regions like Regina, Ottawa, and Toronto, affecting legal sales and necessitating margin adjustments.
Good morning. My name is Nadia, and I'll be your conference operator today. At this time, I would like to welcome everyone to High Tide Inc.'s Q3 2024 Unaudited Financial and Operational Results Conference Call. (Operator Instructions)
I will now turn the call over to your host, Krystal Dafoe. Please go ahead.
Well, thank you, operator, and 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. Yesterday, on September 16, 2024, the company released unaudited highlights from its financial and operational results for the third fiscal quarter that ended October -- April 30, 2024.
Before we begin, please let me remind you that during the course of this conference call, High Tide's management may make statements,
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