GrowGeneration Corp. reported a significant decline in its financial performance for the fiscal year ending December 31, 2024, with net sales of $188.9 million, a decrease of 16.4% from $225.9 million in 2023. The company's gross profit also fell to $43.7 million, down 28.6% from the previous year, primarily due to the closure of 19 retail locations and ongoing pricing pressures in the industry. The net loss for the year was $49.5 million, compared to a loss of $46.5 million in 2023, reflecting a continued struggle to maintain profitability amid challenging market conditions.
In response to these challenges, GrowGeneration implemented a strategic restructuring plan in July 2024, which included the consolidation of underperforming retail locations and workforce reductions. The company closed 12 retail locations as part of this initiative, which is expected to generate annualized cost savings of approximately $12 million. The restructuring efforts incurred costs of $2.4 million, which included inventory disposal and employee termination benefits. The company anticipates that these restructuring activities will be substantially completed by the end of the first quarter of 2025.
Operationally, GrowGeneration maintained a total of 31 retail locations across 12 states as of December 31, 2024, with a total physical footprint of over 724,000 square feet. The company reported a slight increase in same-store sales of approximately 0.9%, driven by growth in commercial sales and customer retention in markets where retail locations were closed. Additionally, proprietary brand sales as a percentage of total sales in the Cultivation and Gardening segment increased to 24.2%, up from 18.8% in 2023, indicating a successful push to expand its proprietary product offerings.
The company faced challenges in its internal controls, as highlighted by an adverse opinion from its independent auditors regarding the effectiveness of its internal control over financial reporting. A material weakness was identified in the Storage Solutions segment's ERP system, which the company is actively working to remediate by transitioning to a more integrated system. Despite these setbacks, GrowGeneration remains focused on its growth strategies, including expanding its commercial sales and enhancing its e-commerce capabilities, as it seeks to navigate the evolving landscape of the hydroponics and gardening industry.
About GrowGeneration Corp.
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