GrowGeneration Sees Proprietary Product Sales at 40% in 2026 Amid Expansion Plans

GrowGeneration Corp. (GRWG) expects proprietary product sales to reach 40% of revenue by 2026, while expanding business-to-business and international reach. CEO Darren Lampert stated the company is focusing on becoming a leaner, more profitable business with a strong focus on B2B customers. The company has seen sequential improvements in revenue, gross margin, and operating expenses.

GrowGeneration Corp. (GRWG), the largest specialty hydroponic retailer, released its second-quarter 2025 financial results, highlighting sequential improvements in revenue, gross margin, and operating expenses. The company reported net sales of $41.0 million, up 14.7% quarter-over-quarter, and a gross profit margin of 28.3%, up from 26.9% in Q2 2024 [1].

Notable improvements include a 22.9% reduction in store operating expenses to $7.9 million and a reduced net loss of $4.8 million compared to $5.9 million year-over-year. The company maintains a strong financial position with $48.7 million in cash and no debt. GrowGen operates 29 retail locations across 11 states, spanning 709,000 square feet of retail and warehouse space [1].

CEO Darren Lampert commented, "In the second quarter, GrowGeneration delivered sequential improvements for revenue, gross margin, and operating expenses—clear indicators that our strategy is taking hold. We also improved Adjusted EBITDA by $2.7 million quarter over quarter, reflecting the early impact of our cost control and margin improvement initiatives. We are building a leaner, more profitable, product-driven organization focused on business-to-business customers" [1].

GrowGen's strategic shift toward higher-margin proprietary brands, which now represent 32% of cultivation and gardening revenue, up significantly from 21.5% in Q2 2024, contributed to gross margin expansion from 26.9% to 28.3%. The company is successfully executing its cost-cutting initiatives, reducing store operating expenses by 22.9% year-over-year to $7.9 million [1].

Looking ahead, management expects Q3 2025 revenue to exceed $41 million, indicating continued sequential growth. However, they withheld full-year guidance citing macroeconomic uncertainties related to global trade policies, consumer demand shifts, and retail pricing pressures. The company's adjusted EBITDA loss of $1.3 million was slightly worse than the $1.1 million loss in Q2 2024 but improved by $2.7 million compared to Q1 2025, suggesting their transformation efforts are gaining traction [1].

GrowGeneration's expansion into home gardening, partnerships with mass-market retailers, and international distribution deals in the EU and Costa Rica represent diversification efforts beyond their core hydroponics business. The company expects proprietary product sales to reach 40% of revenue by 2026, while expanding business-to-business and international reach [1].

References:
[1] https://www.stocktitan.net/news/GRWG/grow-generation-reports-second-quarter-2025-financial-kjruw2qd4gta.html