Trulieve Faces Decline in Q2 Revenue Amidst Rising Operational Costs

Trulieve Cannabis (TRUL.CD) announced a broader loss for the second quarter. The company highlighted that the unusually high temperatures and a decrease in consumer spending were negatively impacting the performance for the current quarter. The cannabis industry is currently grappling with challenges such as declining prices, rising input costs, a tight labor market, and growing competition.

The company’s executives, during a post-earnings call, mentioned that the extreme heat primarily affected cannabis sales due to reduced store traffic, as consumers preferred to stay indoors. Eric Des Lauriers, a Senior Research Analyst at Craig-Hallum Capital Group, supported this observation, stating that extreme heat typically leads to decreased store visits.

For the reported quarter, Trulieve’s revenue saw a 10% decline, amounting to $282 million compared to the previous year. In contrast, the operating expenses surged by 205%, reaching $433 million. However, the company noted a sequential increase in its retail revenue (excluding deferred revenue) by $3 million, which was driven by increased store traffic and volume.

Like many of its industry peers, Trulieve has implemented various cost-saving measures. The company announced its plans to reduce inventory and conserve cash by cutting wages and eliminating redundancies throughout 2023.

For the quarter ending June 30, Trulieve reported a loss of $404 million or $1.8 per share. This is a significant increase from the previous year’s loss of $22 million or 9 cents per share.

[Source: Reuters]

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