Canopy Growth Corporation (NASDAQ:CGC) stock fell Friday after the Canadian cannabis company reported weaker-than-expected second-quarter fiscal 2027 results.
Canopy Growth Misses Earnings and Revenue Estimates
In U.S. dollar terms, Canopy Growth reported a second-quarter loss of 7 cents per share, wider than Wall Street’s expected loss of 3 cents per share.
The company’s net loss increased by 35.7 million Canadian dollars, largely due to 35.8 million Canadian dollars in fair value charges related to Canopy USA assets.
Revenue totaled $58.149 million (81.4 million Canadian dollars), missing the analyst estimate of $59.12 million.
Cannabis net revenue rose 30% to 66.2 million Canadian dollars, driving growth.
However, Storz & Bickel revenue fell 4% to 15.1 million Canadian dollars. Weaker consumer spending in certain markets weighed on sales.
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Adjusted EBITDA Improves Despite Margin Pressure
Canopy Growth reported an adjusted EBITDA loss of 2.9 million Canadian dollars, a 6% improvement from a year earlier.
Higher cannabis revenue and cost savings supported the improvement. However, lower medical cannabis reimbursement rates under Canada’s Veterans Affairs program partly offset those gains.
Adjusted gross margin fell to 31% from 33% a year earlier. The latest figure excludes 2.1 million Canadian dollars in inventory step-up charges related to the MTL Cannabis acquisition.
Canopy Growth Targets Profitability in Fiscal 2027
CFO Tom Stewart said the company continues to make progress toward profitability, putting it within reach of positive adjusted EBITDA during fiscal 2027.
Canopy Growth aims to achieve positive adjusted EBITDA during fiscal 2027 as it focuses on cost controls and operational improvements.
International net revenue surged 141%, driven by strong medical cannabis sales in Germany and Poland.
The company also entered the U.K. market, expanded its Australian product portfolio and strengthened its European supply chain.
Canopy Growth expects improvements in cultivation capabilities to support further growth.
CGC Price Action: Canopy Growth shares were down 9.03% at $0.61 at the time of publication on Friday, according to Benzinga Pro data. Trading volume reached 4.91 million shares, about 71.6% above the 100-day average of 2.86 million, signaling heightened trading activity and potential volatility in the micro-cap stock.
Photo by T. Schneider via Shutterstock
