How did CGC's Q4 2024 forecast compare to past quarters?

Canopy Growth's (CGC) Q4 2024 financial performance showed improvements in certain areas compared to past quarters, but it also reflected ongoing challenges:

1. Revenue Growth: CGC's Q4 2024 net revenue increased by 7% year-over-year, which is a positive trend. If we exclude divested businesses, the growth escalates to 16%. This suggests that Canopy Growth is making strides in generating revenue, particularly in its core business segments such as Canada medical cannabis and Storz & Bickel products.
2. Cost Reductions: A significant reduction in Canada cannabis Cost of Goods Sold (COGS) by 54% in FY2024 versus FY2023 is a notable improvement. This indicates that Canopy Growth's cost reduction initiatives are bearing fruit, potentially enhancing gross margins and profitability.
3. Gross Margins Improvement: The Consolidated Gross Margins for Canopy Growth improved to 27% in FY2024, up from the previous year's 22.4%. This is a substantial improvement of 4,600 basis points year-over-year, suggesting that Canopy Growth is becoming more efficient in its operations.
4. Storz & Bickel's Performance: Storz & Bickel® delivered its best Q4 revenue quarter, with net revenue increasing 43% as compared to Q4 2023. This is a strong performance that bodes well for the future of Canopy Growth's consumer goods division.
5. Challenges and Legal Issues: Despite the positive developments, Canopy Growth faces ongoing challenges including legal issues. The company is being sued by an investor for allegedly misleading the market about the costs of launching the Claybourne pre-rolls and the Storz & Bickel business. These legal challenges could impact investor confidence and financial results if not managed properly.

In conclusion, while Canopy Growth has shown improvements in revenue and gross margins, it still faces significant challenges that could impact its financial performance and market perception. The company's management will need to address these issues effectively to sustain the positive trends seen in Q4 2024.