Hydrofarm Q2 net sales down 28% YoY to $39.2 mln.

• Hydrofarm Holdings Group reports Q2 2025 net sales of $39.2 million, down from $54.8 million. • Gross profit margin decreased to 7.1% from 19.8%. • Adjusted gross profit margin decreased to 19.2% from 24.4%. • SG&A expense and adjusted SG&A expense decreased by 13.5% and 15.7%, respectively. • Net loss decreased.

Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM), a leading manufacturer and distributor of hydroponics equipment and supplies, reported its second-quarter 2025 financial results today. The company experienced a significant decline in net sales, but also showed improvements in gross profit margin and SG&A expenses, as well as a reduction in net loss. The company's restructuring plan aims to drive cost savings and improve profitability.

Key financial highlights for the second quarter include:
- Net sales decreased by 28.4% to $39.2 million compared to $54.8 million in the prior year period.
- Gross profit margin decreased to 7.1% from 19.8%, primarily due to lower net sales and a decline in proprietary brand sales mix.
- Adjusted gross profit margin decreased to 19.2% from 24.4%.
- SG&A expense improved to $16.1 million, a 13.5% decrease compared to the prior year period.
- Adjusted SG&A expense improved to $9.8 million, a 15.7% decrease compared to the prior year period.
- Net loss decreased to $16.9 million from $23.5 million in the prior year period.

Hydrofarm's Chief Executive Officer, John Lindeman, commented on the results, stating, "While our topline was softer than anticipated due to persistent industry headwinds, we did see encouraging performances from certain proprietary brands as well as our international business. We initiated a new restructuring plan designed to further reduce costs by optimizing our product portfolio, with a primary focus on rationalizing underperforming distributed brands, as well as right-sizing our manufacturing and distribution footprint. We expect this plan will result in excess of $3 million in annual cost savings plus additional working capital improvements."

The company also reported positive free cash flow of $1.4 million and maintained a healthy liquidity position with $11.0 million in cash and $9 million in available credit. The company's restructuring plan includes optimizing the product portfolio, focusing on underperforming distributed brands, and right-sizing the manufacturing footprint.

Hydrofarm's Q2 2025 results show significant revenue decline, narrowing losses, and a new restructuring plan to combat persistent industry headwinds. Despite the challenges, the company remains focused on driving high-quality revenue streams, improving profitability, and strengthening its financial position.

References:
[1] https://www.stocktitan.net/news/HYFM/hydrofarm-holdings-group-announces-second-quarter-2025-dval21cu15z9.html