Ascend Wellness (OTCMKTS:AAWH) Releases Quarterly Earnings Results, Beats Expectations By $0.07 EPS

Key Points

• Ascend Wellness beat quarterly EPS expectations, reporting a loss of $0.05 per share versus the $0.12 consensus estimate, a $0.07 improvement.
• Q2 revenue rose 7.9% sequentially to $126.1 million, while adjusted EBITDA increased 10.6% to $29.1 million; retail sales grew 11.5% and the company expanded to 56 locations.
• Management expects 2%–4% sequential revenue growth in Q3, but warned that an Illinois union strike, pricing pressure, competition and a closed Michigan cultivation site could weigh on results. Analysts maintain a consensus Hold rating.

Ascend Wellness (OTCMKTS:AAWH - Get Free Report) announced its quarterly earnings results on Wednesday. The company reported ($0.05) earnings per share (EPS) for the quarter, beating analysts' consensus estimates of ($0.12) by $0.07, Zacks reports. Ascend Wellness had a negative return on equity of 1,099.51% and a negative net margin of 26.24%.

Here are the key takeaways from Ascend Wellness' conference call:

• Q2 revenue rose 7.9% sequentially to $126.1 million, while adjusted EBITDA increased 10.6% to $29.1 million and margin expanded to 23.1%, supported by stronger retail sales and operating leverage.
• Retail sales grew 11.5% sequentially to $92.7 million, transactions increased 6.7%, and retail accounted for 73.5% of revenue. Ascend’s footprint reached 56 locations, and management expects to meet or exceed its 60-store year-end target.
• Management cited nearly 5% sequential market-share growth across its seven-state footprint, accelerating product launches, improving brand performance, and rising customer loyalty and traffic as evidence that Ascend is gaining share despite overall market contraction.
• Federal cannabis rescheduling proceedings have advanced to the briefing stage, while applications under the DEA registration pathway and an expected year-end crackdown on intoxicating hemp products could improve industry normalization and shift demand toward regulated operators.
• Management guided to 2%–4% sequential revenue growth for Q3, with Illinois’ month-long union strike expected to weigh on wholesale sales. The company also continues to face pricing pressure, competitive intensity, and a closed Michigan cultivation site undergoing repairs.

Ascend Wellness Stock Performance

AAWH traded down $0.01 on Wednesday, hitting $0.41. The company had a trading volume of 1,060 shares, compared to its average volume of 97,060. The stock has a fifty day moving average price of $0.46 and a 200-day moving average price of $0.51. Ascend Wellness has a 12-month low of $0.34 and a 12-month high of $1.20. The stock has a market capitalization of $84.23 million, a price-to-earnings ratio of -0.65 and a beta of 1.22.

Wall Street Analyst Weigh In

Separately, Zacks Research upgraded Ascend Wellness from a "strong sell" rating to a "hold" rating in a report on Tuesday, May 12th. One equities research analyst has rated the stock with a Hold rating, Based on data from MarketBeat, the company currently has a consensus rating of "Hold".

About Ascend Wellness

Ascend Wellness Holdings, Inc engages in the cultivation, manufacture, and distribution of cannabis consumer packaged goods in the United States. The company offers flower, pre-rolls, concentrates, vapes, edibles, tinctures, and other cannabis-related products under the Common Goods, SimplyHerb, Ozone, Ozone Reserve, Royale, Tunnel Vision, Miss Grass, Lowell Smokes, Edie Parker, 1906, and AiroPro brands. It also owns, operates, and manages cannabis cultivation facilities and dispensaries. The company sells its products through company-owned retail stores and third-party licensed retail cannabis stores.

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