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Ayr Wellness Inc. (OTCQX: AYRWF) hiked its outlook for the year on Thursday despite posting results that missed expectations — as sales slip and losses rise. The multi-state operator reported financial results for the first quarter ending June 30, 2022

Ayr reported approximately $110.1 million in revenue during the period, up 20.6% versus the same period last year; and a loss of 1% sequentially — below the Yahoo Finance Average analyst estimate for revenues of $114.81 million.

The company also reported a second-quarter net loss of $40.25 million, up 77% sequentially; versus a net loss of $37.4 million in the same period last year. The earnings were a loss of $0.56 per share versus a loss of $0.11 cents per share in the previous quarter.

“Our second half growth will be slower than previously expected, but the earnings power of the business remains outstanding,” said CEO Jonathan Sandelman. “We continue to make investments in people and processes, while remaining prudent through these turbulent economic times.”

Ayr reported a gross profit of $40.3 million, versus a gross profit of $45.5 million in the first quarter. Adjusted EBITDA was $19.6 million, down 28.5% from $27.4 million in the same period last year.

The company ended the quarter with a cash balance of $116.7 million and closed $81.5 million of real estate financing transactions, bringing the year-to-date total to $108 million with an annualized blended cost of capital of 7.8%.

East of the Mississippi

In May, the New Jersey Cannabis Regulatory Commission approved Ayr for adult-use cannabis sales for all three of its retail locations there — the maximum amount of dispensaries permitted under current state law.

The company since then has seen new revenue stream from both New Jersey and Boston; after Ayr received the green light to sell adult-use cannabis in Boston’s Back Bay, the company’s first adult-use dispensary in the neighborhood.

To the South, Ayr added two more Florida dispensaries to their 50 stores across the state.

Based on the second quarter results, “coupled with an uncertain macroeconomic backdrop,” Ayr also updated their guidance for the rest of the year; expecting revenue, adjusted EBITDA and operating income to grow around 10% sequentially by the third quarter, followed by “an acceleration in the pace of sequential growth in Q4 2022.”

“With our core operating footprint in place, the vast majority of our capex behind us, and a strong, $117 million cash position on our balance sheet,” Sandelman said, “we believe that we are well-placed to weather this economic environment and emerge stronger on the other side.”

The post Ayr Wellness Raises Guidance Despite Headwinds appeared first on Green Market Report.

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Adam Jackson, KahliBuds, 420GrowLife