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Hydrofarm Holdings Group HYFM posted its Q3 2024 results, showing mixed performance with a drop in net sales but improved gross margins.



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<h3 class="wp-block-heading">Key Financial Highlights</h3>



<ul>
<li>Net Sales: Down 18.8% year-over-year, totaling $44.0 million, primarily due to lower demand in the cannabis sector.</li>



<li>Gross Profit Margin: Increased significantly to 19.4% (from 6.1%), attributed to cost-saving measures and a higher mix of proprietary brands.</li>



<li>Net Loss: Improved to $13.1 million, compared to $19.9 million last year, driven by reduced SG&amp;A expenses.</li>



<li>Adjusted EBITDA: Stayed positive but decreased to below $0.1 million, influenced by declining net sales but offset by lower operating costs.</li>
</ul>



Read Also:<a href="https://www.benzinga.com/markets/cannabis/24/11/41775004/gardening-giant-scotts-miracle-gro-reports-46-yoy-drop-in-q4-net-sales-for-its-cannabis-focused-"> Gardening Giant Scotts Miracle-Gro Reports 46% YoY Drop In Q4 Net Sales For Its Cannabis-Focused Subsidiary</a>



<h3 class="wp-block-heading">Cash Flow And Liquidity</h3>



The company ended Q3 with $24.4 million in cash and $17 million in available credit. Free Cash Flow for the quarter was negative, at $(5.3) million, largely due to adjustments in working capital.



<h3 class="wp-block-heading">Outlook</h3>



Hydrofarm <a href="https://www.globenewswire.com/en/news-release/2024/11/07/2976495/0/en/Hydrofarm-Holdings-Group-Announces-Third-Quarter-2024-Results-and-Reaffirms-2024-Outlook-on-Key-Metrics.html">reaffirmed its 2024 guidance</a>, targeting positive Adjusted EBITDA and Free Cash Flow for the year, despite a challenging market environment. CEO Bill Toler highlighted continued focus on proprietary brands and operational efficiency as key drivers of margin growth.



These results underscore Hydrofarm&#8217;s cautious but optimistic approach, balancing cost management with strategic growth initiatives amidst industry pressures.



Price Action



Hydrofarm traded down 4.66% at $0.56 when the market opened on Thursday.



Read Next: <a href="https://www.benzinga.com/markets/cannabis/24/11/41745816/sndls-q3-revenue-slides-year-over-year-due-to-liquor-market-softening-cannabis-operations-going-">SNDL&#8217;s Q3 Revenue Slides Year-Over-Year Due To Liquor Market Softening, Cannabis Operations Going Strong</a>

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CEO Bill Toler highlighted continued focus on proprietary brands and operational efficiency as key drivers of margin growth.

Hydrofarm Holdings Q3 Results: Revenue Decline But Improved Margins And Reduced Losses - Hydrofarm Holdings Group (NASDAQ:HYFM)

Nicolás Jose Rodriguez

Hydrofarm Holdings Group

Bill Toler

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HYFM

Hydrofarm Holdings Q3 Results: Revenue Decline But Improved Margins And Reduced Losses

Hydrofarm Holdings Group Inc

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