Revenue growth of 30% from the second quarter of 2021 driven by continued execution of the Value Buds growth strategy
"Since our last quarterly report, we have been aggressively expanding our footprint adding stores at an average pace of one per week and now have 71 stores opened across
FINANCIAL AND OPERATING HIGHLIGHTS
- Sales of
$38.7 million , a 141.9% increase from the third quarter of 2020, and a 30.2% increase from the second quarter of 2021 - Gross profit of
$6.5 million , or 16.9% of sales, a 21.8% increase from the third quarter of 2020 and a 26.0% increase from the second quarter of 2021 - Generated positive operating profit (pre-IFRS 16 adjustments) and cash flow across the portfolio of operating stores before pre-opening and other non-operating lease expenses and head office expenses
- Opened eleven (11) new Value Buds stores: six (6) in
Ontario and five (5) inAlberta , approximately one per week since the release of our Q2 2021 financial results - Nova now has seventy-one (71) stores operating and a pipeline of organic opportunities under development or active negotiation, the majority of which are in
Ontario
OUTLOOK
The Company continues to be on track toward its objective of two hundred (200) stores in 2023. All but three (3)
- Nova's total store count now sits at seventy-one (71) and the Company's revenue continues to grow with the Value Buds stores generating
$3 million in annual run rate sales1 on average across the portfolio, inclusive of stores only recently opened or converted.
Improved operating leverage across the store portfolio as variable costs such as labour and store operating expenses declined as a percentage of sales from the second quarter of 2021 to the third quarter of 2021. - Fixed operating expenses, including head office costs, remained stable and consistent from Q2 2021 to Q3 2021.
THIRD QUARTER 2021 FINANCIAL RESULTS
For further information, refer to the Company's interim financial statements and MD&A for the three and nine months ended
CONFERENCE CALL
Management will conduct a conference call on
ABOUT
Additional information about
NON-IFRS FINANCIAL MEASURES
Average sales on an annual run-rate basis is not a measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS. Investors are cautioned that this measure should not replace sales, net earnings or loss (as determined in accordance with IFRS) as an indicator of the Company's performance, of its cash flows from operating, investing and financing activities or as a measure of its liquidity and cash flows. The Company's method of calculating the aforementioned non-IFRS financial measure may differ from the methods used by other issuers. Therefore, the measure may not be comparable to similar measures presented by other issuers.
Average sales on an annual run-rate basis has been calculated by taking the average of the actual weekly sales for
FORWARD LOOKING STATEMENTS
This news release contains forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "continue", "anticipate", "will", "should", "plan", "intention", and similar words suggesting future events or future performance. All statements and information other than statements of historical fact contained in this news release are forward-looking statements. In particular, this news release contains forward-looking statements pertaining to: Nova's average sales on an annual run-rate basis; Nova's retail cannabis business strategy, including organic growth and strategic acquisitions; Nova's discount pricing model; the conversion of
With respect to forward-looking statements contained in this news release, the Company has made assumptions regarding, among other things: the Company's ability to identify locations for, construct and open new stores and the costs related thereto; the availability of hardware and equipment for those stores; government regulation and applicable laws will not change in a manner adverse to the Company; receipt of necessary regulatory approvals to open new stores; the Company's ability to obtain leases for new sites and attract the necessary personnel to operate new stores; the cost of converting existing stores to the Value Buds banner; demand for the products the Company sells; other factors that will drive sales growth in the Value Buds banner; availability of acquisition opportunities; sustainability of competitors' businesses and competition in the retail cannabis industry, including from the illicit cannabis market; consumer demands; and factors that influence consumer behavior.
Although the Company believes that the expectations reflected in the forward-looking statements, and the assumptions on which such forward-looking statements are made, are reasonable, especially given the unprecedented uncertainty of the full extent and impact of COVID-19, there can be no assurance that such expectations and assumptions will prove to be correct. Readers should not place undue reliance on forward-looking statements included in this news release. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that may cause actual performance and financial results to differ materially from any estimates, forecasts or projections. These risks and uncertainties include, among other things, the duration and severity of the COVID-19 pandemic on the business, operations and financial condition of the Company; the risk that Nova will be unable to execute its strategic plan and growth strategy, as planned without significant adverse impacts from various factors beyond its control; dependence on suppliers; potential delays or changes in plans with respect to capital expenditures and the availability of capital on acceptable terms; risks inherent in the retail cannabis industry; competition for, among other things, customers, supply, capital and skilled personnel; changes in labour costs and markets; incorrect assessments of the value of acquisitions; general economic and political conditions in
The forward-looking statements contained in this news release are made as of the date hereof. Except as expressly required by applicable securities legislation, Nova does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
1 Annual run rate is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. For more information on non-IFRS financial measures, see the 'Non-IFRS Financial Measures' section in our MD&A for the three and nine months ended |
SOURCE
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