Tilray Brands, Inc., NASDAQ: TLRY, touted the growing U.S. hemp derived THC beverage and profit margins improved in its core cannabis sector, despite skipping opportunities to grow for a better bottom-line, according its earnings release on Tuesday.
In constant-currency terms, the company’s net revenue was $186 million for the quarter that ended February 28. The company also stated that the new initiatives and SKU reductions reduced revenue potential by $13 millions.
In a press release, CEO Irwin D. Simon stated that “we prioritized the quality of sales and revenues, protected margins and reduced debt and improved our Capital Structure.” Tilray’s strong balance sheet is ready to seize new opportunities.
The company highlighted several positive developments in its various business segments. Simon stated that Tilray had increased its gross margins 800 basis points, and achieved “its highest cannabis gross margins for almost two years.” According to reports, the division maintained its sales leadership in Canada while also generating strong growth in Germany.
Tilray’s beverage division has increased distribution to 10 U.S. states of their hemp-derived THC-based drinks, continuing the push for the American cannabis market. The company increased the “Project 420”, its plan for cost saving, to $33 millions. It suggests that more aggressive measures are being taken than originally announced.
Tilray reported recently that it had reduced its debt by $71,000,000 and slashed $58,000,000 in convertible notes. Simon stated that the company had $248m in marketable securities and cash.
Quarterly results were released in an environment of uncertain economic conditions. Recently announced international tariffs, which have triggered a memecoin frenzy on the markets, are also to blame. Tilray conducted analysis on potential effects and concluded that tariffs shouldn’t affect sales. The company said its American beverage brand is manufactured and sold exclusively in the U.S. while Canadian cannabis operations and European operations are similarly decoupled from concerns about cross-border tariffs. Manitoba Harvest’s wellness products are currently exempt from new tariffs.
Simon’s comments reflected a disciplined approach to growth. He said, “We won’t seek growth just for its own sake if it doesn’t add value and profit to our shareholders.”