GrowGeneration 2025 Q3 Earnings Narrowed Losses and Strong Sequential Revenue Growth

GrowGeneration (GRWG) reported Q3 2025 earnings that beat revenue estimates and significantly narrowed losses year-over-year. The company’s stock surged post-earnings, with a 30-day strategy showing potential returns, albeit with volatility. CEO Darren Lampert highlighted sequential growth, cost reductions, and strategic shifts toward proprietary brands.

Revenue

GrowGeneration’s total revenue declined 5.5% year-over-year to $47.25 million but rose 15.4% sequentially. The Cultivation and Gardening segment generated $38.4 million in revenue, while the Storage Solutions segment contributed $8.9 million. The sequential growth was driven by a 31.6% increase in proprietary brand sales within cultivation and gardening, alongside store closures and operational efficiency.

Earnings/Net Income

The company narrowed its net loss to $-2.44 million, a 78.7% improvement from $-11.44 million in 2024 Q3. Earnings per share (EPS) improved to -$0.04 from -$0.19, representing a 78.9% reduction in losses. This reflects successful cost-cutting measures and margin expansion, though the company still faces challenges in sustaining profitability.

Post-Earnings Price Action Review

A strategy of buying GRWG shares on earnings beats and holding for 30 days showed a 20.6% return over 36 periods, with a 15.1% annualized return. However, performance varied quarter-over-quarter, with gains of 20.8% after Q1 2023 earnings but a 10.6% decline following Q3 2023. The stock surged 20%+ after Q2 2024 and Q3 2025 reports but faced a 15.1% average decline when earnings were missed. Investors must weigh growth opportunities against risks like margin compression and market volatility.

CEO Commentary

Darren Lampert emphasized Q3 as an inflection point, with $47.3 million in net sales, 27.2% gross margins, and $1.3 million positive adjusted EBITDA. Strategic priorities include expanding proprietary brands to 40% of cultivation/gardening revenue by 2026, closing underperforming stores, and investing $7M+ in cultivation infrastructure. The CEO also highlighted diversification into B2B, greenhouse agriculture, and international markets via partnerships.

Guidance

Darren Lampert provided Q4 revenue guidance of ~$40 million, with expectations of year-over-year growth and positive adjusted EBITDA in 2026. Greg Sanders noted potential gross margin compression in Q4 due to durable sales and inventory adjustments but remains optimistic about cost discipline and B2B expansion.

Additional News

GrowGeneration announced strategic expansion into home gardening via its Viagrow brand and a distribution partnership with Arett Sales, expanding wholesale reach to 32 states. The company also closed five underperforming stores, reducing its footprint to 24 locations, and invested over $7 million in cultivation infrastructure. CEO Darren Lampert highlighted plans to enter international markets through partnerships like V1 Solutions and Arett Sales, aiming to boost B2B and greenhouse agriculture channels.