GrowGeneration Corp. reported a decline in financial performance for the third quarter and the first nine months of 2024, as detailed in its latest 10-Q filing. For the three months ended September 30, 2024, net sales were $50.0 million, a decrease of 10.2% from $55.7 million in the same period of 2023. For the nine months, net sales totaled $151.4 million, down 14.2% from $176.4 million year-over-year. The decline is attributed to the consolidation and closure of retail locations, which impacted sales volume, particularly in the Cultivation and Gardening segment, where sales fell from $48.0 million to $41.4 million for the quarter.
Gross profit also saw a significant drop, with Q3 2024 gross profit at $10.8 million, down 33.2% from $16.2 million in Q3 2023. For the nine-month period, gross profit decreased to $37.6 million from $49.6 million. The gross profit margin for Q3 2024 was 21.6%, down from 29.1% in the prior year, reflecting the impact of reduced sales and increased restructuring costs.
The company reported a loss from operations of $(12.1) million for Q3 2024, compared to $(8.0) million in Q3 2023. The nine-month loss from operations increased to $(28.0) million from $(21.8) million. Net losses before taxes for Q3 2024 were $(11.5) million, compared to $(7.3) million in Q3 2023, while the nine-month net loss rose to $(26.1) million from $(19.1) million.
In response to these challenges, GrowGeneration announced a strategic restructuring plan in July 2024, which includes closing 12 underperforming retail locations and workforce reductions. The restructuring has incurred costs of $2.1 million to date, with total expected costs around $2.4 million. The company anticipates annualized cost savings of approximately $12.0 million from these actions.
As of September 30, 2024, total assets decreased to $199.6 million from $239.1 million at the end of 2023, while total stockholders' equity fell to $143.2 million from $173.4 million. Cash and cash equivalents were reported at $27.4 million, down from $29.8 million at the end of 2023.
Additionally, the company has faced challenges with its internal controls, as identified in its financial reporting. Material weaknesses were noted, leading to an adverse opinion from its independent auditor regarding internal control over financial reporting. Management is actively working on remediation efforts to address these deficiencies.
About GrowGeneration Corp.
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