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or Name

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Fire & Flower Holdings Corp (2)
Symbol FAF
Shares Issued 45,154,000
Close 2023-05-15 C$ 1.02
Market Cap C$ 46,057,080
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Fire & Flower loses $10.09-million in Q1

2023-05-15 12:49 ET - News Release

Mr. Stephane Trudel reports


Fire & Flower Holdings Corp. has released its financial and operational results for the fiscal 2023 first quarter ended March 31, 2023.

First quarter 2023 and recent highlights:

  • Q1 2023 consolidated revenue of $43.1-million and consolidated gross profit of $12.5-million;
  • Achieved retail gross margin percentage of 25.9 per cent for the quarter, representing sequential quarterly improvements from 23.4 per cent in Q2 2022, 24.2 per cent in Q3 2022 and 25.4 per cent in Q4 2022;
  • Improvement in gross margin achieved by selecting the best products to the company's customers while taking advantage of margin opportunities through its pricing strategy, enabled by the Hifyre digital retail platform;
  • Year-over-year and market-outperforming same-store sales increase of 17.2 per cent for Q1 2023;
  • Digital segment revenue returned to $3-million for the quarter driven by growth in monthly recurring revenue and new products and services;
  • Adjusted EBITDA of negative $1.8-million for Q1 2023, representing a 52.6-per-cent sequential improvement from negative $3.8-million in Q4 2022;
  • Entered into a master licensing agreement with Alimentation Couche-Tard Inc. and exclusive first right to negotiate in new and emerging international cannabis markets;
  • Launched Spark Marketplace in the App Store, a first-of-its-kind cannabis marketplace app that enables customers to purchase cannabis with unprecedented convenience;
  • Exited non-core and low-margin components of the Pineapple Express business while maintaining the Firebird Delivery retail service, resulting in annualized cost savings of approximately $2-million;
  • The company is evaluating financing opportunities required to drive consolidation and bring the business to positive free cash flow
  • Actively evaluating retail consolidation opportunities that are accretive to the cash flow of the business.

"Our first quarter of 2023 is a clear demonstration of our continued discipline on delivering positive improvements in our overall operational results. Once again, we saw same-store sales and gross margin growth. As we look towards 2023 as a transformational year, the company is focused on our core retail business, supported by Hifyre, which enables us to deliver higher gross margin percentages and the best available products to our customers," shared Stephane Trudel, chief executive officer of Fire & Flower.

"Our continued innovation and long-term focus is demonstrated through the recent launch of the Spark Marketplace mobile app that allows customers to shop with ease and has already produced significantly larger transaction amounts than in-person transactions.

"Consolidation opportunities in the industry that are fully accretive to our business are a key priority as we look to a long-term goal of achieving 10-per-cent market share. While keeping our eye on our long-term vision, our teams are working diligently to generate savings in SG&A [selling, general and administrative] expenses by simplifying our business and building value in core assets," concluded Mr. Trudel.

Note on prior-year comparative period

As at Dec. 31, 2022, the company's fiscal year was changed from a 52-week or 53-week period ending the Saturday closest to Jan. 31 to a calendar 12-month period ending Dec. 31 to enhance comparability of its periodic financial statements with those of its peers. Accordingly, the information presented in this news release, the interim financial statements, and the management's discussion and analysis reflect the results for the calendar quarter ended March 31, 2023, while the comparative figures reflect the 13-week period ended April 30, 2022.

Financial and operational highlights for the first quarter of 2023

  • Consolidated revenue of $43.1-million for Q1 2023, representing a 5.3-per-cent increase from $40.9-million in Q1 2022; the year-over-year increase was driven by higher retail revenues for the period;
  • Consolidated gross profit of $12.5-million (28.9 per cent of revenue) for Q1 2023, representing an increase of 2.4 per cent from $12.2-million (29.7 per cent of revenue) in the prior-year comparative period, primarily contributed by an increase in gross profit in the digital segment;
  • Adjusted EBITDA of negative $1.8-million for Q1 2023, an improvement of 22.5 per cent compared with negative $2.3-million for Q1 2022;
  • Net loss of $10.1-million for Q1 2023 compared with net loss of $9.9-million in Q1 2022, including restructuring and impairment charge of $1.7-million and nil for prior year;
  • Cash and cash equivalents balance of $8.2-million at the end of Q1 2023.


  • Retail revenue for Q1 2023 increased 9.1 per cent from $29.6-million in Q1 in the prior year despite having nine fewer stores;
  • Year-over-year same-store sales increase of 17.2 per cent compared with Q1 in the prior year;
  • Retail gross profit for Q1 2023 was $8.4-million (25.9 per cent of revenue) compared with $8.2-million (27.8 per cent) for Q1 in the prior year; the retail segment continues to show steady improvement in gross margin percentage and gross profit dollars; retail gross margin percentage has increased sequentially over the last 12 months from 23.4 per cent in Q2 2022, 24.2 per cent in Q3 2022 and 25.4 per cent in Q4 2022;
  • Over 560,000 Spark Perks members made up 77 per cent of transactions in the quarter;
  • The company had 92 stores open and in operation at the end of March 31, 2023.

Wholesale and logistics:

  • Wholesale and logistics revenue for q1 2023 was $7.9-million, a decrease of $600,000 compared with $8.5-million in Q1 2022;
  • Segment gross profit for Q1 2023 of $1.2-million, a decrease of $100,000 compared with $1.3-million in Q1 2022;
  • Exited Pineapple non-core low margin business to business delivery services with a focus on the retail Firebird Delivery service, resulting in annualized cost savings of approximately $2-million with the anticipation of the wholesale and logistics segment returning to positive adjusted EBITDA.

Hifyre digital platform:

  • Digital segment revenue for Q1 of fiscal 2023 was $3-million compared with $2.9-million in Q1 of the prior year;
  • Gross profit margin was 95.7 per cent for the quarter ended March 31, 2022, compared with 89.7 per cent for Q1 of the prior year;
  • Hifyre continues to commercialize the consumer insights and distribution modules to Hifyre IQ data analytics platform customers, driving additional incremental high-margin revenue.

Updates subsequent to March 31, 2023:

  • On April 17, 2023, the company announced that it had signed a master licensing agreement (MLA) with MC Cannabis Inc., an indirect wholly owned subsidiary of ACT. The MLA gives the company exclusive first right to negotiate entries in additional legal cannabis markets and exclusive development of co-located stores in Ontario with Fire & Flower with a commitment to open seven stores.

Webcast and conference call

Fire & Flower will host a webcast and conference call with Stephane Trudel, chief executive officer; John Chou, chief financial officer; and Chris Bolivar, executive vice-president, commercial and growth, at 8:30 a.m. EDT, on May 15, 2023. The webcast will discuss Fire & Flower's fiscal 2023 first quarter financial and operational results and the company's plans for 2023.

Dial-in information

Canada and United States dial-in number (toll-free):  1-833-470-1428

International:  1-404-975-4839

Access code:  945842

Replay information (available until June 5, 2023)

Canada and United States (toll-free):  1-866-813-9403

International:   1-929-458-6194

Replay access code:  370356

Upon completion of the live conference call, a replay of the conference call will be accessible on Fire & Flower's website.

Fire & Flower's financial statements and management discussion and analysis for the period are available on Fire & Flower's SEDAR profile on SEDAR and on Fire & Flower's website.

About Fire & Flower Holdings Corp.

Fire & Flower is a leading, technology-powered, adult-use cannabis retailer with more than 90 corporate-owned stores in its network. The company leverages its wholly owned technology development subsidiary, Hifyre, to continually advance its proprietary retail operations model while also providing additional independent high-margin revenue streams. Fire & Flower guides consumers through the complex world of cannabis through education-focused, best-in-class retailing while the Hifyre digital retail and analytics platform empowers retailers to optimize their connections with consumers. The company's leadership team combines extensive experience in the technology, logistics, cannabis and retail industries.

Through the strategic investment of Alimentation Couche-Tard (owner of Circle K convenience stores), the company has set its sights on global expansion as new cannabis markets emerge and is poised to expand into the United States when permitted through its strategic licensing agreement with Fire & Flower U.S. Holdings upon the occurrence of certain changes to the cannabis regulatory regime.

Fire & Flower is a multibanner cannabis retail operator that owns and operates the Fire & Flower, Friendly Stranger, Happy Dayz and Firebird Delivery brands. Fire & Flower Holdings owns all issued and outstanding shares in Fire & Flower Inc. and Friendly Stranger Holdings Corp., licensed cannabis retailers that own and operate cannabis retail stores in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario and the Yukon territory.

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