Adam JacksonCresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) reported its first quarter 2024 financials ending March 31, showing showing flat revenue over the year at $184 million, but beating analyst expectations by $1.2 million.
The Chicago-based Sunnyside owner again cited the impact of divestment efforts it chose to nudge profitability. Still, Cresco saw improvements in other metrics.
Adjusted gross profit rose 7% year-over-year to $95 million, with an adjusted gross margin of 51%, a 580 basis point improvement. The company also reduced its adjusted SG&A expenses by 24% year-over-year to $52 million, representing 28% of revenue.
Cresco posted income before income taxes of $16 million, although it posted a net loss of $2 million for the quarter. However, adjusted EBITDA surged 82% year-over-year to $53 million, with an adjusted EBITDA margin of 29%, a 1,380 basis point improvement.
One of the more impressive aspects of Cresco’s results was the company’s cash flow generation. The company reported $36 million in operating cash flow, a 1,000% increase year-over-year, and $33 million in free cash flow.
“The continued development of our teams’ capabilities and our relentless focus on efficient execution is leading to very strong performance across our retail and branded product business resulting in a 10x increase in operating cash flow year-over-year,” CEO Charles Bachtell said in a statement. “This is just the start, with upcoming adult use catalysts…we have the ability to generate significant operating leverage and additional cash flow going forward.”
Cresco also maintained its leading market share positions in Illinois, Pennsylvania, and Massachusetts. The company’s brand portfolio includes Cresco, High Supply, FloraCal, Good News, Wonder Wellness Co., Mindy’s, and Remedi.
Cresco said it wants to keep trying to get ahead of and benefit from potential adult-use cannabis legalization in Ohio, Florida, and Pennsylvania.
