Fire & Flower Revenue Falls 30% Sequentially in Short Q4

Fire & Flower Continues Improved Retail Performance in Fourth Quarter and Fiscal 2022 Results
  • Results include the 9-week quarter and the 48-week fiscal year ended December 31, 2022 for the Company’s revised fiscal year end
  • Achievement of three consecutive quarters of year-over-year same store sales and retail gross margin percentage increase on the path to Positive Adjusted EBITDA and Free Cash Flow

Fourth Quarter Fiscal 2022 and Recent Highlights:

  • Consolidated revenue for the 9-week fourth quarter of $30.5 million and consolidated gross profit of $7.4 million
  • Achieved Retail gross margin percentage of 25.4% for the 9-week quarter ended December 31, 2022, representing second consecutive quarterly improvement from 23.4% in Q2 2022 and 24.2% in Q3 2022
  • Year-over-year same-store sales increase of 3.9% for Q4 2022, representing significant sequential improvements from previous quarters and sustaining the trend into early 2023
  • Improvement in both same-store sales and gross margin percentage a result of the continuing positive retail trend enabled by our Spark Perks™ member pricing program and enhanced merchandise strategy which has built price credibility among cannabis consumers
  • Adjusted EBITDA for the 9-week fourth quarter of 2022 was negative $3.8 million which included restructuring, integration related costs and other one-time charges
  • Consolidated gross margin decreased to 24.3% primarily due to underperformance of the Pineapple Express delivery business, which the Company has addressed subsequent to the year end through cost saving measures
  • The Company anticipates 2023 annualized savings of $6 million in SG&A and lease expenses and anticipates achieving positive Adjusted EBITDA during the first half of the fiscal year
  • Digital revenue of $1.7 million primarily due to the shortened quarter and timing of data revenue
  • Expanded Circle K co-location program to a total of seven (7) stores including corporate and licensed stores
  • Actively evaluating retail consolidation opportunities which are accretive to the cash flow of the business

TORONTO, March 28, 2023 /CNW/ – Fire & Flower Holdings Corp. (“Fire & Flower” or the “Company”) (TSX: FAF) (OTCQX: FFLWF), today announced its financial and operational results for the fourth quarter and fiscal year 2022 ended December 31, 2022.

2022 was a turnaround year for Fire & Flower, represented by three consecutive quarters of same store sales and gross margin growth. We look to 2023 as a transformative year where we anticipate achieving positive Adjusted EBITDA during the first half of the fiscal year through a disciplined approach to our core retail business, driving top line revenue, gross profit dollars and reducing our overhead expenses.

Stéphane Trudel, Chief Executive Officer of Fire & Flower.

We are delivering higher gross margin percentages with increased retail foot traffic, consumer price credibility and using our advanced Hifyre data capabilities to ensure that we have the most in-demand products for our customers.

“Since we announced our Get-to-Green initiative earlier in 2022 we have focused on reducing operating expenses, simplifying our operations, increasing utilization of assets, and improving our management of working capital.  We expect to generate annualized SG&A expense and lease savings of approximately $6.0 million in 2023 through various initiatives, including rationalizing overhead and administrative functions, subleasing underutilized properties, and the recent restructuring of our Pineapple Express delivery and logistics business to drive profitability across all segments.

“We continue to look towards consolidation in the industry and are actively pursuing opportunities that are fully accretive to our business with the long-term goal of achieving 10% market share through a high quality and profitable retail network. In addition, our strategic relationship with Alimentation Couche-Tard continues through our co-located store program that already has provided key learnings to inform future developments in Canada, the U.S. and Europe.”

Consolidated Financial Highlights

Financial & Operational Highlights for the Fourth Quarter and Fiscal Year 2022

  • Consolidated revenue of $156.0 million for the 48-week fiscal year 2022 and $30.5 million for the 9-week Q4 2022. The quarter-over-quarter decrease was driven by the short quarter which was 9 weeks compared to prior quarter which was 13 weeks.
  • Consolidated gross profit of $41.1 Million (26.4% of revenue) for the 48-week fiscal year 2022 and gross profit of $7.4 million (24.3% of revenue) for the 9-week fourth quarter of 2022.
  • Adjusted EBITDA of negative $15.0 million for the 48-week fiscal year 2022 and negative $3.8 million for the 9-week Q4 2022.  Adjusted EBITDA for the 9-week Q4 2022 was impacted by higher SG&A expenses including restructuring, integration costs and other one time charges.
  • Net loss of $89.5 Million for the 48-week fiscal year 2022 and net loss of $29.9 million for the 9-week Q4 2022, including restructuring and impairment charges of $45.7 million and $21.5 million million for the respective periods.
  • Cash balance of $12.4 million.

Segment Revenue

Segment Adjusted EBITDA


  • Retail revenue for the 48-week fiscal year 2022 was $115.8 million and $22.9 million for the 9-week Q4 2022. Decrease in Retail revenue quarter-over-quarter reflects the result of a shorter 9-week quarter compared to 13-week quarter for the comparable period.
  • Year-over-year same-store sales improved for Q4 2022 for three consecutive quarters to an increase of 3.9%, from decreases of 26%, 14%, and 4% respectively for Q1, Q2, and Q3 2022.
  • Retail gross profit for the 48-week fiscal year was $29.1 million (25.2% of revenue) and $5.8 million for the 9-week Q4 2022 (25.4% of revenue). The Retail segment continues to show improvement in both gross margin percentage and gross profit dollars when prorated and accounting for seasonality. The 25.4% margin represents consecutive quarterly improvement from 23.4% in Q2 2022 and 24.2% in Q3 2022.
  • Retail Adjusted EBITDA for the 48-week fiscal year was negative $11.9 million and Adjusted EBITDA for Retail for the 9-week Q4 2022 was negative $1.9 million, representing quarter-over-quarter improvements when prorated.
  • The Company had 92 stores open and in operation at the end of December 31, 2022, compared to 90 stores at the end of Q3 2022 and 102 stores at the end of Q4 2021.

Wholesale and Logistics

  • The current fiscal quarter and year results include the operations of Open Fields Distribution wholesale business in the province of Saskatchewan, the cross-docking service in the province of Manitoba which started in Q4, and Pineapple Express Delivery, which was acquired on January 21, 2022.
  • Wholesale and Logistics revenue for the 48-week fiscal year was $30.7 million and for the 9-week Q4 2022 $5.9 million.
  • Segment gross profit for the 48-week fiscal year was $3.5 million and $0.1 million for the 9-week Q4 2022.
  • Wholesale and Logistics Adjusted EBITDA was negative $1.7 million for the 48-week fiscal year 2022 and negative $1.1 million for the 9-week Q4 2022.
  • The year-over-year decline in segment gross profit and Adjusted EBITDA reflects increased cost of sales and a lower profitability of delivery, which the Company has addressed through a restructuring of Pineapple Express and a focus on profitable business segments.
  • Opening of the Open Fields Manitoba cross-docking facility on October 26, 2022 through receipt of its license from the Liquor, Gaming and Cannabis Authority of Manitoba. The total addressable Manitoba market is approximately the same size as the Saskatchewan market and Open Fields is leveraging its relationships with major cannabis licensed producers to extend service into this new market.

Hifyre™ Digital Platform

  • Digital segment revenue for the 48-week fiscal year 2022 was $9.6 million and $1.7 million for the 9-week Q4 2022.
  • Digital segment Adjusted EBITDA of $4.4 million in 48-week fiscal year 2022 and Adjusted EBITDA in the 9-week Q4 2022 of $0.6 million.
  • The sequential decrease in revenue and Adjusted EBITDA was primarily driven by a shorter quarter and timing of data revenue.
  • Hifyre continues to commercialize the Consumer Insights and Distribution modules to Hifyre IQ data analytics platform customers, driving additional incremental high margin revenue.

Updates Subsequent to December 31, 2022

  • On March 15, 2023, the Company expanded its market presence in Winnipeg by opening a store in the Sports Hospitality Entertainment District (SHED) in downtown Winnipeg and bringing the total number of Fire & Flower stores in Manitoba to eight (8).
  • The Company has executed upon a reorganization of certain administrative functions across all departments and of the Pineapple Express business to eliminate significant selling, general and administrative expenses as part of ongoing cost efficiency measures and achieving positive Adjusted EBITDA in the first half of 2023.
  • Fire & Flower is actively evaluating retail consolidation opportunities which are accretive to the cash flow of the business.

Adjusted EBITDA

Non-IFRS Measures – Adjusted EBITDA

“Adjusted EBITDA” is a Non-IFRS metric used by management that does not have any standardized meaning prescribed by IFRS and may not be fully comparable to similar measures presented by other companies. Management defines Adjusted EBITDA as the income (loss) for the period, as reported, before income taxes and other expense (income) items such as finance costs, finance income, gains and losses related to derivative liability revaluations and debt extinguishments, and adjusted for share-based compensation, depreciation and amortization, impairment expenses, restructuring charges and acquisitions, foreign exchange differences and strategic initiative professional fees. The Company believes this non-IFRS measure is a useful metric to evaluate its core operating performance and uses this measure to provide shareholders and others with supplemental measures of its operating performance. The Company also believes that securities analysts, investors and other interested parties, frequently use Adjusted EBITDA in the evaluation of companies, many of which present similar metrics when reporting their results. We caution readersthat Adjusted EBITDA should not be substituted for determining net income (loss) as an indicator of operating results, or as a substitute for cash flows from operating activities.  A reconciliation of net income (loss) to Adjusted EBITDA is presented above.

Adjusted EBITDA for the 48 week Fiscal year ended December 31, 2022 was negative $15.0 million.

Webcast & Conference Call

Fire & Flower will host a webcast and conference call with Stéphane Trudel, Chief Executive Officer, John Chou, Chief Financial Officer and Chris Bolivar, EVP Commercial and Growth at 8:30 a.m. EDT on March 28, 2022. The webcast will discuss Fire & Flower’s Fiscal 2022 fourth quarter financial and operational results and the Company’s plans for 2023.

Dial-In Information

Canada and United States dial-in number (Toll Free): 1 833 470 1428International: +1 404 975 4839

Access code:  644072

Webcast Sign-Up

Replay Information (Available until April 18, 2023)

Canada and United States (Toll Free): 1 866 813 9403International: +1 929 458 6194

Replay Access Code: 163848

Upon completion of the live conference call, a replay of the conference call will be accessible on Fire & Flower’s website at

Fire & Flower’s financial statements and management discussion and analysis for the period are available on Fire & Flower’s SEDAR profile at and on Fire & Flower’s website at

About Fire & Flower

Fire & Flower is a leading, technology-powered, adult-use cannabis retailer with more than 90 corporate-owned stores in its network. The Company leverages its wholly-owned technology development subsidiary, Hifyre, to continually advance its proprietary retail operations model while also providing additional independent high-margin revenue streams. Fire & Flower guides consumers through the complex world of cannabis through education-focused, best-in-class retailing while the Hifyre digital retail and analytics platform empowers retailers to optimize their connections with consumers. The Company’s leadership team combines extensive experience in the technology, logistics, cannabis and retail industries.

Through the strategic investment of Alimentation Couche-Tard Inc. (owner of Circle K convenience stores), the Company has set its sights on global expansion as new cannabis markets emerge and is poised to expand into the United States when permitted through its strategic licensing agreement with Fire & Flower U.S. Holdings upon the occurrence of certain changes to the cannabis regulatory regime.

Fire & Flower is a multi-banner cannabis retail operator that owns and operates the Fire & Flower, Friendly Stranger, Happy Dayz and Firebird Delivery brands. Fire & Flower Holdings Corp. owns all issued and outstanding shares in Fire & Flower Inc. and Friendly Stranger Holdings Corp., licensed cannabis retailers that own and operate cannabis retail stores in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and the Yukon territory.

To learn more about Fire & Flower, visit

Original Press Release

Published by NCV Newswire
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