Cresco Labs Reports FY 2023 Financials Results
The TDR Three Key Takeaways for Cresco Labs Earnings:
- Cresco Labs reported a 3x increase in Operating Cash Flow in FY 2023.
- Adjusted EBITDA nearly doubled in Q4.
- Revenue in Q4 dipped 2% from previous year and 6.4% FY.
Cresco Labs Inc. (CSE: CL, OTC: CRLBF), headquartered in Chicago, unveiled its fourth quarter and full-year financial results for the period ending December 31, 2023. The company, known for its branded cannabis products and Sunnyside dispensaries, reported a fourth quarter revenue of $188 million, a slight 2% decrease from the previous year, primarily due to strategic divestitures focused on enhancing profitability.
Revenue in Q4 dipped 2% from previous year and 6.4% on full year results. For the fourth quarter, Cresco Labs achieved a gross profit of $96 million, with an adjusted gross profit climbing 12% year-over-year to $100 million. This adjustment represents an impressive 53% of revenue, demonstrating an 850-basis point improvement. Additionally, the company significantly reduced its SG&A expenses to $57 million, achieving $54 million in annualized adjusted SG&A savings. This strategic cost management led to a 20% reduction in adjusted SG&A expenses year-over-year, equating to 29% of revenue.
Net income for the quarter stood at $5 million, with adjusted EBITDA nearly doubling from the previous year to $55 million, accounting for 29% of revenue. This marked a substantial 1,400 basis point improvement, underlining the successful implementation of Cresco Labs’ Year-of-the-Core strategy.
The fiscal year 2023 highlights included total revenue reaching $771 million and adjusted gross profit totaling $377 million, or 49% of revenue. The Year-of-the-Core strategy led to a $35 million decrease in adjusted SG&A and a more than 200 basis point increase in adjusted EBITDA margin to 23% of revenue. Despite reporting a net loss of $180 million for the year, which included $151 million of impairment charges, Cresco Labs generated $59 million in operating cash flows, ending the year with $109 million in cash and cash equivalents.
Cresco Labs’ financial results for the fourth quarter and full year of 2023 highlight significant improvements in profitability and cash flow. As Cresco Labs continues to execute its strategic initiatives, its financial performance in the year ahead will be closely watched by investors and our team at TDR. Want to keep up to date with all of TDR’s research, subscribe to our daily Baked In newsletter.
