Tilray Inc. shares on Monday gained back some of their losses in recent weeks after the Canadian cannabis producer posted a narrow loss and played up its prospects for European and beverage expansion.
Revenue increased to $155.15 million from $129.46 million.
Analysts expected Tilray to lose 9 cents a share on revenue of $170.5 million, according to a survey by FactSet.
Shares jumped 12% to $7.21 in premarket trades on Monday. Prior to the gains, the stock had lost about 9% thus far in 2022 and fell 43% in the past 12 months.
The cannabis company is also changing its name to Tilray Brands Inc. as it diversifies into beverage and other consumer packaged goods.
On a conference call with analysts, Tilray said it would benefit from potential legalization of adult use cannabis in Germany. It’s also seeing growth from its beverage brands such as Sweetwater Brewing.
But the company said it’s still facing challenges of oversupply in the Canadian market as well as the impact of the Omicron variant.
In another plus, Tilray said its cost savings from its acquisition of Aphria will be $20 million more than expected, or a total of $100 million. It reached $70 million in cost savings to date, the company said, and is on track to achieve its original cost reduction plan of $80 million ahead of schedule. It will generate the additional $20 million of synergies in fiscal 2023.
Tilray CEO Irwin Simon said the company maintained its No. 1 market share position in Canada despite “market saturation” and related competitive challenges.
“In Germany — Europe’s largest and most profitable medical cannabis market — our nearly 20% share leads the market,” he said. “We believe this, coupled with our infrastructure, will also allow us to capture the adult-use market as legalization accelerates under the new coalition government.”
In the U.S., its alcoholic beverages brands SweetWater Brewing and Manitoba Harvest remain profitable and continue to invest in products and acquisition, he said.
“These profitable businesses further provide an opportunity to launch THC-based products upon federal legalization in the U.S.,” Simon said.
During the quarter, the company expanded its spirits portfolio through the acquisition of Breckenridge Distillery.
Mr. Simon concluded, “The totality of our performance, our prospects and our global platform make Tilray Brands’ opportunity as compelling as ever, driven by our success as a cannabis and lifestyle CPG powerhouse and our relentless focus on delivering shareholder value.”