Tilray Brands (TLRY) is expected to post a loss in its second-quarter earnings scheduled for January 8, after the closing bell; however, it is likely to see a marginal improvement in revenue.
Wall Street estimates the Canadian cannabis player to post EPS -$0.14. The revenue consensus stands at $211.15 million, representing a 0.1% Y/Y improvement.
Over the last 2 years, TLRY has beaten EPS estimates 75% of the time and has beaten revenue estimates 38% of the time. However, as per Zacks Equity Research, the company may not continue the trend this quarter.
They have projected Tilray’s quarterly earnings to project underlying weaknesses, including margin pressures across core segments. The company’s overall margins have been facing pressures due to weak margins in the Beverage and Cannabis segments, it noted. Craft brands and spirits businesses have also faced ongoing challenges, Zacks added.
“Although the beverage segment has been soft-impacted by ongoing SKU rationalization, the company is focused on its turnaround. It is making progress against the beer integration, optimizing strategy and Project 420 initiative. Management sees potential for the beverage category based on the diversification of offerings and the superior products with improved operations, leveraged acquired brands and supporting performance,” Zacks said.
Investors will also be keenly watching out for developments over U.S. President Donald Trump’s executive order to reclassify marijuana as a Schedule III substance (or a less dangerous drug). They will also be monitoring for commentary on rescheduling, tax relief and the new Tilray Medical USA subsidiary.
On December 13, Tilray’s stock closed ~65% higher, registering its best weekly gain ever. On a YTD basis, however, it has risen by only 2.55% compared to a 1.45% rise in the broader markets.