High Tide Q4 Earnings: Revenue Beat, EPS Miss, Positive Free Cash Flow, Accelerating Membership Growth And More

High Tide Inc. (Nasdaq: HITI) (TSXV: HITI) (FSE: 2LYA) recently filed its year-end audited 2024 financial results, revealing a mix of positive and negative news. The company's revenue and positive free cash flow were highlights, while earnings per share (EPS) missed expectations. Let's dive into the key takeaways from the earnings report.

Revenue Beat and Positive Free Cash Flow

High Tide's revenue for the year ended October 31, 2024, reached an all-time record of $522.3 million, up 7% from the previous year. In the fourth fiscal quarter, revenue was a record $138.3 million, representing an increase of 9% year over year and 5% sequentially. The company also generated $5.9 million of positive free cash flow in the fourth fiscal quarter, with trailing free cash flow totaling $22.0 million. This positive cash flow trend allows High Tide to invest in growth initiatives, such as international expansion and acquisitions.

EPS Miss

Despite the strong revenue growth, High Tide's EPS missed expectations. The company generated a net loss of $3.8 million during the year ended October 31, 2024, which marked a meaningful improvement from a net loss of $41.0 million in the previous year. In the fourth fiscal quarter, the company generated a net loss of $4.8 million, compared to a net loss of $31.8 million year over year and net income of $0.8 million sequentially. Adjusted for non-cash impairment charges, net income was $0.2 million for the fourth quarter, which compared to $2.5 million year over year.



Accelerating Membership Growth

High Tide's Cabana Club loyalty program continues to grow at an impressive rate. The program now has over 5.32 million members worldwide, including over 76,000 ELITE members. In Canada, the company has over 1.72 million Cabana Club members, an increase of over 34% year over year and 11% sequentially. The company has also reached 73,000 ELITE members in Canada, an increase of 161% year over year and 28% sequentially. This accelerating membership growth is a testament to the company's strong retail presence and effective marketing strategies.

Market Share and Retail Sales

High Tide's Canna Cabana stores held a 19% share of the cannabis retail market in Alberta and 10% in Ontario during the fourth fiscal quarter. Across the five provinces where the company operates, Canna Cabana represented an 11% market share during the fourth fiscal quarter, which is consistent with the 11% market share during the third fiscal quarter. The company's annualized retail sales per square foot were $1,699 across the Canna Cabana store network during the fourth fiscal quarter of 2024, up 2% sequentially. This was higher than best-in-class retailers like Wal-Mart, Target, and Canadian Tire.

In conclusion, High Tide's Q4 earnings report showed a mixed bag of results, with strong revenue growth and positive free cash flow offset by an EPS miss. The company's accelerating membership growth and market share are positive signs for its future prospects. As High Tide continues to invest in growth initiatives and expand its retail presence, investors should keep a close eye on the company's progress.