Full Press Release Details
SNDL Reports First Quarter
2025 Financial and Operational Results
The Company Delivers Record
Gross Margin and Positive Cash Flow; Announces Strategic Review of U.S. Platform and Listing Structure
EDMONTON, AB, May 1, 2025 /CNW/ - SNDL Inc. (NASDAQ:
SNDL) (CSE: SNDL) ("SNDL" or the "Company") reported its financial and operational results for the first
quarter ended March 31, 2025. All financial information in this press release is reported in millions of Canadian dollars unless otherwise
SNDL has also posted a supplemental investor presentation
on its website, found at https://sndl.com.
The Company will hold a conference call and webcast
presentation at 10:00 a.m. EDT (8:00 a.m. MDT) on Thursday, May 1, 2025. The conference call details can be found below.
MANAGEMENT HIGHLIGHTS
"In the first quarter of 2025, we saw robust
growth in our Cannabis segments and record aggregate Gross Margin. Our improvements in Free Cash Flow generation helped us nearly break
even despite seasonal impacts and our unrestricted cash balances increased versus year end." said Zach George, Chief Executive Officer
"During the first quarter of 2025, we advanced
several strategic initiatives to drive long-term value creation and strengthen our platform:
Subsequent to the first quarter of 2025, on April
9, 2025, we announced that we had entered into an arrangement agreement to acquire 32 cannabis retail stores from 1CM Inc. ("1CM")
for a total cash consideration of $32.2 million. We have also announced on April 22, 2025, the launch of our highly anticipated Rise Rewards
loyalty program, designed to help Value Buds customers save more, earn more, and get even more from every visit. SNDL intends to expand
the program across its retail banners in the future.
SNDL's Board of Directors has approved an amendment
to the Company's share repurchase program (the "Share Repurchase Program"), as described in further detail below
Finally, our Board of Directors has initiated a formal
strategic review to evaluate SNDL's exposure to U.S. multi-state licensed cannabis enterprises and its current exchange listing status,
as outlined later in this document.
Our track record of operational execution, diversified
asset base, and strong balance sheet - including $220.9 million of unrestricted cash as of March 31, 2025 - gives us with the flexibility
to pursue both organic and inorganic opportunities with compelling returns. This review supports our long-term goal of establishing SNDL
as a global cannabis leader and delivering sustainable shareholder value." concluded Zach George.
TOTAL COMPANY HIGHLIGHTS
| Three months ended March 31 | ||||||
| ($000s) | 2025 | 2024 | % Change | |||
| IFRS Financial Measures | ||||||
| Net revenue | 204,914 | 197,750 | 3.6 % | |||
| Gross profit | 56,641 | 50,400 | 12.4 % | |||
| Operating loss | (12,053) | (4,377) | -175.4 % | |||
| Change in cash and cash equivalents | 2,508 | (6,087) | 141 % | |||
| Non-IFRS Financial Measures (1) | ||||||
| Gross margin | 27.6 % | 25.5 % | 2.2pp | |||
| Adjusted operating loss | (9,031) | (4,466) | -102 % | |||
| Free cash flow | (1,090) | (6,388) | -83 % |
BUSINESS SEGMENT HIGHLIGHTS
SNDL operates and reports its business through four
segments: Liquor Retail, Cannabis Retail, Cannabis Operations, and Investments. Additionally, a consolidated total for Cannabis is presented,
encompassing the combined results of the two Cannabis segments, along with the revenue elimination associated with the Cannabis Operations
sales to the provincial boards that are expected to be subsequently repurchased by the Company's licensed retail subsidiaries for resale.
Corporate and Shared Service expenses are reported as "Corporate".
| Three months ended March 31 | ||||||
| ($000s) | 2025 | 2024 | % Change | |||
| Net Revenue | ||||||
| Liquor Retail | 109,472 | 116,054 | -5.7 % | |||
| Cannabis Retail | 77,540 | 71,306 | 8.7 % | |||
| Cannabis Operations | 34,319 | 22,395 | 53.2 % | |||
| Intersegment Eliminations | (16,417) | (12,005) | -36.8 % | |||
| Total Cannabis | 95,442 | 81,696 | 16.8 % | |||
| Investments | - | - | 0 % | |||
| Total | 204,914 | 197,750 | 3.6 % | |||
| Operating Income | ||||||
| Liquor Retail | 1,980 | 2,180 | -9.2 % | |||
| Cannabis Retail | 5,162 | (1,042) | 595.4 % | |||
| Cannabis Operations | (486) | 891 | -154.5 % | |||
| Total Cannabis | 4,676 | (151) | >1,000% | |||
| Investments | (1,601) | 13,079 | -112.2 % | |||
| Corporate | (17,108) | (19,485) | 12.2 % | |||
| Total | (12,053) | (4,377) | -175.4 % | |||
| Adjusted Operating Income | ||||||
| Liquor Retail | 1,980 | 2,180 | -9.2 % | |||
| Cannabis Retail | 5,162 | (1,042) | 595.4 % | |||
| Cannabis Operations | 2,409 | 1,146 | 110.2 % | |||
| Total Cannabis | 7,571 | 104 | >1,000% | |||
| Investments | (1,601) | 13,079 | -112.2 % | |||
| Corporate | (16,981) | (19,829) | 14.4 % | |||
| Total | (9,031) | (4,466) | -102.2 % |
SNDL is Canada's largest private sector liquor retailer,
operating at April 30, 2025 in 165 locations, predominantly in Alberta, under its three retail banners: "Wine and Beyond" (13),
"Liquor Depot" (19), and "Ace Liquor" (133).
| Three months ended March 31 | |||||
| ($000s) | 2025 | 2024 | % Change | ||
| Net revenue | 109,472 | 116,054 | -5.7 % | ||
| Gross profit | 27,803 | 28,806 | -3.5 % | ||
| Gross margin | 25.4 % | 24.8 % | 0.6pp | ||
| Operating income | 1,980 | 2,180 | -9.2 % | ||
| Adjusted operating income | 1,980 | 2,180 | -9.2 % |
SNDL is one of Canada's largest private-sector
cannabis retailer, operating at April 30, 2025 in 186 locations under its three retail banners: "Value Buds" (121), and "Spiritleaf"
(65, of which 7 are corporate stores and 58 are franchise stores). The Company's Cannabis Retail strategy is based on several pillars,
including the quality of its store locations, its range of products, and the unique experiences provided to customers. Using data and
insights from a large volume of monthly transactions enables SNDL to leverage technology and analytics to inform and improve its retail
| Three months ended March 31 | ||||||
| ($000s) | 2025 | 2024 | % Change | |||
| Net revenue | 77,540 | 71,306 | 8.7 % | |||
| Gross profit | 19,627 | 18,359 | 6.9 % | |||
| Gross margin | 25.3 % | 25.7 % | -0.4pp | |||
| Operating income | 5,162 | (1,042) | 595.4 % | |||
| Adjusted operating income | 5,162 | (1,042) | 595.4 % |
SNDL has a diverse brand portfolio from value to premium,
emphasizing premium inhalable formats and a full suite of 2.0 products. With enhanced procurement capabilities and plans to continue evolving
toward a cost-effective cultivation and manufacturing operation, the Cannabis Operations segment is a key enabler of SNDL's vertical integration
| Three months ended March 31 | ||||||
| ($000s) | 2025 | 2024 | % Change | |||
| Net revenue | 34,319 | 22,395 | 53.2 % | |||
| Gross profit | 9,211 | 3,235 | 184.7 % | |||
| Gross margin | 26.8 % | 14.4 % | 12.4pp | |||
| Operating income | (486) | 891 | -154.5 % | |||
| Adjusted operating income | 2,409 | 1,146 | 110.2 % |
This press release is intended to be read in conjunction
with the Company's condensed consolidated interim financial statements and the notes thereto for the three months ended March 31, 2025,
and the accompanying Management's Discussion and Analysis. These documents are available under the Company's profile on SEDAR+ at www.sedarplus.ca
and EDGAR at www.sec.gov/edgar.shtml.
In anticipation of the upcoming completion of the
court-supervised restructurings of Parallel and Skymint, SNDL's Board of Directors has initiated a formal strategic review process to
evaluate the Company's exposure to U.S. multi-state licensed cannabis enterprises and its current exchange listing status. The review
aims to ensure alignment between SNDL's long-term growth strategy and its public market platform, with the overarching objective of maximizing
In recent months, SNDL has received inbound interest
from multiple cannabis operators in both Canada and the United States that have expressed interest in being acquired or pursuing asset-level
or corporate transactions. This engagement underscores SNDL's balance sheet and management strength, as well as its emerging reputation
as a disciplined, retail-forward cannabis operator with international scale. As the North American cannabis industry continues to rationalize,
well-capitalized consolidators like SNDL are uniquely positioned to realize synergies, drive operating leverage, and deliver sustained
To fully evaluate these opportunities and preserve
strategic flexibility, the Board is assessing whether to maintain the Company's current equity market listings, or transition to an alternative
structure - similar to leading U.S multi-state operators who operate outside of NYSE and Nasdaq exchange frameworks. Such a move would
provide SNDL with the regulatory latitude to actively manage a broader North American cannabis platform, potentially consolidating licensed
cannabis businesses across multiple U.S. states.
There is no assurance that any transaction or listing
change will result from this strategic review. The Company does not intend to provide additional updates unless or until the Board has
approved a specific course of action or determines that further disclosure is appropriate.
The Company will hold a conference call and webcast
presentation at 10:00 a.m. EDT (8:00 a.m. MDT) on Thursday, May 1, 2025.
To access the live webcast of the call, please visit the following link:
A replay of the webcast will be available at https://sndl.com/financials/quarterly-results/default.aspx
SNDL Inc. (NASDAQ: SNDL, CSE: SNDL), through its wholly
owned subsidiaries, is one of the largest vertically integrated cannabis companies and the largest private-sector liquor and cannabis
retailer in Canada, with retail banners that include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds and Spiritleaf. With
products available in licensed cannabis retail locations nationally, SNDL's consumer-facing cannabis brands include Top Leaf, Contraband,
Palmetto, Bon Jak, La Plogue, Versus, Value Buds, Grasslands, Vacay, Pearls by Gr n, No Future and Bhang Chocolate. SNDL's investment
portfolio seeks to deploy strategic capital through direct and indirect investments and partnerships throughout the North American cannabis
industry. For more information, please visit www.sndl.com
Forward-Looking Information Cautionary Statement
This news release includes statements containing certain "forward-looking information" within the meaning of applicable
securities law ("forward-looking statements"), including, but not limited to, statements regarding the Company's operational
goals and plans, the anticipated impact of the Company's strategic steps on long-term success and shareholder value, the anticipated impact
of the Company's intentions and strategy with respect to the Rise Rewards loyalty program and retail operations, SNDL's plan to expand
the program to additional retail banners, the anticipated benefit of the Company's strong balance sheet, the Company's strategy with respect
to its operating segments, expectations with respect to the Parallel restructuring process, expectations with respect to the Board's strategic
review process, the Company's margin improvement initiatives, the Company's ability to achieve long-term, sustainable profitability, growth
and efficiencies, the Company's long-term strategic plan, the benefits of the Company's Investment Segment portfolio, the Company's retail
strategy, expectations with respect to the Company's Cannabis Operations segment, , performance of the Company's investments, including
through the SunStream joint venture, the timing and completion of the restructurings of with Parallel and Skymint, the timing and closing
of the transaction to acquire assets from 1CM, repurchases under the Share Repurchase Program and the anticipated benefits thereof, and
any other potential forms of shareholder value creation. Forward-looking statements are frequently characterized by words such as "aim",