Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, and welcome to GrowGeneration's First Quarter 2023 Earnings Conference Call. My name is Joelle, and I'll be coordinating your call today.

Following prepared remarks, we will open the call to questions from analysts and with instructions to be given at that time.

I'll now hand the call over to Clay Crumbliss with IR.

Clay Crumbliss

Thank you, and welcome, everyone to the GrowGeneration First Quarter 2023 Earnings Results Conference Call. recorded. being is call Today's With us Officer; GrowGeneration and Executive Lampert, are Greg Sanders, Darren and of Co-Founder Chief Chief today Financial Corp. Officer

earnings at the have company's the information Investor should to of press on quarter release GrowGeneration's section website You is available issued closed market access after Relations today. ir.growgeneration.com. This first the

statements Private are are actual are future XXXX. safe harbor the materially Certain on call this to current of from management's comments on those events could differ several Act include of based statements. subject and Securities the expectations made These concerning cause Reform uncertainties that to forward-looking forward-looking subject statements, which beliefs risks forward-looking Litigation provisions in described results and to and these

release the today. to results in or today's filings of any other forward-looking discussion detailed of to expressed SEC made a materially risks refer that cause with the the implied from those Please press could for differ actual and statements

will website. financial which provide During filings financial the available GAAP release, press call, measures performance. directly measures earnings most as of our well are some the SEC the business describe we on measures reconciliations non-GAAP The the comparable we as as use to all non-GAAP

Following We one please from limit remarks, question will yourself and research our prepared ask take questions to we analysts. that you one follow-up.

we them as take will time have you and reenter questions, additional queue If the please allows.

Co-Founder Lampert. turn and Now Darren over our CEO, I will the to call Darren?

Darren Lampert

us to XXXX results year financial Clay, XXXX full and everyone. quarter first Thanks, discuss and our for afternoon, you today good Thank our joining guidance.

grateful our up our company each one of entire thank team challenge our our for GrowGen. for to strategy. I steadfast and every across support stepping want being in company's employees always, to As for their continued to executing I'm of

retailer. a than is more just GrowGen

of brands and We developer are label products. a private market-leading

customers. entire community, we We supporting all to dedicated partner our distributor are are passionate and and above growing a hydroponics the a

anniversary XXth celebrate last As we we in a mentioned our quarter, year.

excited into future. past, As great we in continue about our year the ahead, take pride equally our we are we and

I'm high XXXX. revenue expectations, pleased the over end In further which, for first improvement $XX.X quarter, that of net generated results million of quarter our optimism quarter increases of XXXX. at as at our represents the report high we which of GrowGen's the our a the to performed expected, guidance, fourth first end sequential

gross of quarter an loss loss quarter, prior the which XXXX which EBITDA XX.X%, outperformed the of quarter EBITDA Furthermore, We our versus margins million first quarter $X.X issued our represents first adjusted generated had guidance. an the above $XX.X were improvement expectations. of million, adjusted in in first significant previously and

$XX and quarter debt We ended with $XX our marketable equivalents balance and on million sheet. the also securities, million cash, cash first inventory of no of

so challenges previous year transition was it extensively We've dwell the say other than to on of quarters, a in year GrowGen. the spoken about past won't I this, last for

XXXX ago, more our detailed we and As and to better in beyond. profitable for nimble, quarter months transforming on positioned progress efficient business call, our nearly have short we made X be growth earnings significant fourth

the the to with year On cannabis momentum house the state cannabis. state Delaware senate legalize state state with legislative and side, adult-use this could that month. becoming continued, versions has legalize adult-use passing is another Minnesota of last XXnd bill

their North sales Additionally, July X. licenses planned could medical adult-use Carolina programs begin and and Texas, to Georgia issued Maryland first its to with Ohio cannabis dispensary add

Act At reform. reintroduction the SAFE for federal has of level, month hope renewed the federal last

in than a today result, the I've that ahead. been I'm more while excited lie opportunities about a As

managing broader We define certainly ongoing but business challenges our significantly challenges us. they are story, entering don't we're new the the a in us, do chapter the and GrowGen Those on industry. of impact despite focused

XXXX, in cautious optimism, of for and putting growth we where exist resources manner. degree behind they while maintain appropriate in opportunities So disciplined them expect invest an searching a out we and to

continue is, as on means profitability you releases. we from we our that three, back have and the terms seen one, margin at growing front, we label practical in recent focusing will and building our private press acquisition Two, expansion on the are profitable And growth. What brands. putting forefront, are

on Briefly each these. of

e-commerce we accounted committed our is satisfied around Private and quarter distributor of quarter XX.X% the million of for the first First, results are retail XXXX, the sales in our products. e-commerce from XX.X% $X.X remain expansion of sales, and XXXX. of up to our first retail and label label very the of we private brands, proprietary and of overall which in with

Second, GrowGen will believe and our believe continue few positioned current well valuation we're one to garden in the is hydroponics complementary that the are they actively of well We we seeking accretive the companies acquisitions space. as attractive where center business.

Bozeman, in this Michigan Traverse, acquired So we Montana most recently, April. far early a year, We retail in a ago. of the acquisition store store we acquired January. few in Jackson, XXth in state a in a store our Michigan, And with entered weeks

performance As expect stores analyze store closures focus additional major continue We which of these many for the we with part the respect was don't current efforts, a footprint. to our us last to of redundancies this in year. year,

retail execution supply nearly focus initiatives merchandising, centered transformation the million and partners on our includes of technology education monetization of on chain. square key business which various product of X space, focused with around laser a We're feet and

serving Columbus, approximately are We is distribution feet center, operational to East in square third and announce Coast Ohio now customers. located Midwest pleased and XXX,XXX our our that

vast expand the benefit to flow We execute our we continued our Third, we to are expansion think continue past margins which initiatives, our XXXX. cost-cutting we majority profitable which of in are growth, strategies. attain the of prioritizing and will our margin through will believe revenue through efforts

for our In inventory expanded need today significant points forward. the addition, quarter as first in we that is the position margin, in basis a gross quarter we margins and feel don't better see fourth much reflected going discounting X,XXX our over inventory

full for guidance to Turning year XXXX.

$XXX range to adjusted in the million million net million range into EBITDA We loss $X revenue million, a a maintaining are the to profit. of translating $X our of $XXX in

sequential our revenue and stabilization and in quarter-over-quarter to are we through net expect incremental signs continue the business, in of We adjusted EBITDA improvements quarter. second seeing

will With that, to CFO, Greg the call turn Sanders. over our I

Gregory Sanders

you, Thank good afternoon, Darren, everyone. and

XXXX and first will First, will year then our I financial discuss I quarter guidance. results, address our full XXXX

approximately first the of GrowGeneration million million the $XX.X For quarter, generated first representing in a of revenue decline XX%. versus XXXX, $XX.X quarter of

quarter. same-store million Our first sales to XX.X% of quarter million, prior of against ago the $XX.X decline representing XXXX sales were year $XX.X compared the comparable year a for

a million decline $X.X Our XX.X%. e-commerce basis to representing a from declined comparable on revenue $X.X of million,

$XX.X in million quarter compared to period, of the year $XX.X representing ago other improvement and was million revenue distribution XX%. for the Our an

points XX.X% Gross margin in first the in healthy profit points from the XXXX are comparable gross XXXX sequentially our largely XXXX, the for quarter. of completion improvements quarter XXXX. margin rationalization the approximately Gross X,XXX from up and of The margin in ago contribution was initiatives basis fourth XXX percent segments. the retail year of from the a in first attributed to quarter our the quarter basis first increased segment distribution quarter other inventory of and

XXXX from operating to costs XXXX, XX% in $XX.X million reduction. of operational other Store quarter representing of first declined quarter expenses the an $XX.X first and million in the

executed were move reporting sustainable prior forward as The payroll primarily over year the to periods. we we the reductions. savings year-over-year future into reductions attributed are that Further, expect

a or were the represents $X from administrative stock-based million to of This general stock-based in of compensation. million in quarter-over-quarter SG&A. Selling, costs $XXX,XXX compensation. with the which compares and SG&A fourth to were million XX% quarter, $X.X first This derived $X.X quarter improvement

in million Compared first range decreased driven with quarter increased savings to reductions over categories. the and SG&A last $X.X payroll controls XXXX, a broad expense from cost overall year, of

tax XXXX to ago intangibles first period. quarter $X.X million is quarter deferred using to a and realizable. company in or tax benefit GrowGeneration X% did rate expense. the of of not were XXXX, Depreciation are In compared as assets not be year in million of an tax amortization recognize its the first expected the $X.X the income

from a primarily has goodwill. As such, valuation company full XXXX impairment allowance the of established resulting the

the or per ago fourth of loss loss income compared net to a of Compared $X.XX negative improved net million $X.X $XX quarter $X.X to share the million. in XXXX, a Net to million negative the net first a loss net quarter share from year for company million the loss $X.X of per or $X.XX period. was of

XXXX. improvements the well to in loss a the $X.X company increased as $XX.X amortization, of million, of resulting from expense. margin of reductions from million in XXXX, taxes, Adjusted Compared charges loss quarter the share-based in $XXX,XXX was loss depreciation, a excludes first of compared XXXX $X.X restructuring of quarter fourth improved interest, loss gross which to and a EBITDA a primarily first quarter of EBITDA, as compensation, sustainable for revenue, the of to million adjusted

or In onetime severances favorable restructuring the charges company into quarter, impact. the $XXX,XXX -- charges a and expenses onetime consolidation EBITDA, adjusted included first included which had restructuring

Related sheet, cash $X.X of XXXX, to From initiatives. increased XXXX. strategic measures marketable million, equivalents year-over-year of and and $XX.X cash, sequentially securities XX, cash balance the quarter other equivalents flat inventory of company cash was the the had million, which rationalization a March as to fourth to perspective, and total mainly by due

a by collected the well capital, total and million. receivable accounts million as receivable reduced working $X.X Within tax income company as $X.X notes

from the the million of As cash generated such, $X.X in operations positive company quarter.

in that the inventory reduced the positions our outcome quarter, mix company XXXX sufficient levels We In reduction compared the of inventory year-end. the and inventory company XXXX. efforts for first product to believe with [indiscernible]

our improvements where needed to meet of needs that We time we make customers the lower to incremental will inventory. procurement just in to continue inventory ensuring continue while

to on Now our outlook. XXXX moving full

the to earlier, $XXX a adjusted revenue mentioned $XXX a communicated we previously between loss to Darren with in $X are profit. EBITDA year million and to As million and of positive year million be full be full our maintaining $X XXXX million range guidance

sufficient observed We first believe our based of our cost alignments have on and structure we quarter on results. have in stabilization that sales expense

not by expense its further forecasting XXXX, million are reductions reduced company the XXXX. over in in significant we $XX base As

in optimistic the to focused quarter in our show business return industry, our results, that expect confident on both cost the profitable. stay sales to we will compared continue about and XXXX are improvements efforts but the first to EBITDA quarter We in remain to adjusted second to will our navigate ability and incremental controls we

profitability indicated the As forefront goal in business earlier, remarks the XXXX. Darren's of is

disciplined a on invested to capital. is approach Our focus capital centered shifting a approach from on allocation return on preservation to

will fill on We M&A the white execute that space. opportunities right

private the return We in our will where capital products appropriate. deployment also invest of is label

strategy positioning We business company to and the profitability focus our are business and on executing improvement.

remarks. With that, for closing call the turn Darren back over I to will

Darren Lampert

you, Greg. Thank

expansion margin open is cash solid a profitability footing position. profitable we for GrowGen strong your line putting want the and on a XXXX, liquidity to In at reiterate focusing that with solid were and healthy financial balance the forefront, questions, Before on growth. I sheet, we

that encouraged more are during business, significant We progress nimbler company. transition to we're year to forward as of our a move rightsize and a and we made ready stronger, profitable

your for GrowGeneration. today, in you for your interest and thank you time Thank

We Operator? will now take your questions.

Operator

[Operator Instructions].

Your first question with Oppenheimer. Brian from comes Nagel

Brian Nagel

I lot lately I about want we just talk a about Darren, space. GrowGen, the start. -- a guess, the I lot talked for to we've mean, backdrop

maybe Your here, comments your suggest guess. sales more get game, little optimistic l I on a

I geographies level, question seeing? ground the maybe is across kind of there changes meaningful different the have So like it's -- Are you what you trends with interaction type on thing? of the How your been have customers? of any has are in that seeing kind

Darren Lampert

Yes.

the which had for was to revenue, started in think of first know, we quarters for probably certainly you GrowGen, ordinary we've quarters at as start least, X the Brian, since back X XXXX. I down of with, out sequential

What is price consolidation supply/demand and in normalizing to customers. is starting mature stabilization The West. see pick We're our from to we're starting see out up markets.

to starting in are roll new CapEx increasing states New is states. and out

we second in the seeing in positive also We're GrowGen quarters. and markets, should which the activity be boost didn't in outdoor third XXXX, which sales in for a see both

So in time really the it. is saw a was downturn. quarters. again, about seen XXXX, has this lasted X-month X back there we've first We This

albeit stabilization, off number. low seeing very Brian, we're a So

for in And 'XX. quarter which XX% better in the the mid-XXs were certainly down sales, look to XXXX. second same-store were forward. be much that first saw quarter You during we going in down They

Brian Nagel

Got gross it. on just then And margin helpful. and side, the together gross inventory. I that's guess tie it then margins And I'll

So a with of aggressive action year corrective inventories. lot you last your did

'XX clean. came into You

margins, saw I gross trajectory should seeing the mean I So just -- margin gross here the here? in you're you from in we performance of better about trajectory QX. guess inventories think that how -- kind in and

Darren Lampert

I'm going it to Greg. send to over Greg?

Gregory Sanders

Yes.

reduced We much overall XXXX. last of of those on felt So the X that And quarters think last in gross I was by had periods. inventory coming significant better impact you a position impact the in in 'XX, the a the inventory X we in XXXX. margin quarters million as mentioned, $XX into

We We did inventory balance to our make million quarter, nothing in the sequential significance. the but inventory $X.X reduced of improvements in quarter. by

our what believe our we communicate quarter XX.X%, think normalized saw the was results XXXX business at is in profile look margin the gross you We're a upper the periods. I a to more which range as margin for in we first still of profile expected in be future for forward that will the continuing reporting the to basis. normalized gross XXs on mid- in

Darren Lampert

also that range. you in also saw XX% up division Brian, from our private you saw into -- bump Brian, yes, label a XX%

than And Our our normal are higher better products. also. right buying private label much now products we carry margin a

high of margins seeing you're what to into in factoring all mid- it's think XXs. I normalization that So our

Operator

comes Lake Capital question from with Street Smith Markets. next Your Mark

Mark Smith

that transactions. at have I looking is on question First just M&A valuations

you've a bit talk the Darren, far just seeing You've couple stores? little some pricing new at busier months. here of as you Can gotten -- look buying what been as you you're about, last as

Darren Lampert

fixed that buy now. on look Yes, from But you is trading And Mark. sheet very to cash we now. take can to position when and GrowGen's right one you, a the I'm and little the I out market, look exact we're is right when and going sheet, asset going pricing to look goodwill at at stay you GrowGen hard looking assets, you our when individuals our same -- I we're balance value our with with with can at balance inventory an tell thing

are of the So very now. these goodwill transactions portion right minor

Mark Smith

of like you the push for time that Any certainly then seems new about you this and about private that's Is to it And something still what active things Okay. how to spent feel of sales talking some and these of now? label be acquire private continue you. label have insight a into kind goods? It additional goods. you takes you want where maybe ramping brands kind

Darren Lampert

place as continue performing that we products expectations. have team in feel We ramping speak. right Char I now and coming dripper product have both out Coir on are label above extensions do right on lines the we our our private to both

So our wonderful label are right we increase our are continue our where private private label label having in in penetration, sales and seeing And and hold the industry, private very and the products will feel we're products with with that results. taking we from good we're and them we now margins.

Mark Smith

are question, more to really Okay. here, e-commerce, And similar digital today, sitting just where And as then any of sales we a the levers is? little can last industry turn there cannabis function are that at the you pull sales? of a is look kind on

Darren Lampert

label did our increasing We our private I -- one are division more we'll was our trying. our feeling be up on The We're spend that mean, advertising online positive we comfortable quarter-over-quarter. Mark, division. online is see,

fourth the quarter. on bump a to had X% from So quarter first we the

with was online positive seen time that while division. first in we've a our the So

Operator

comes Carter next Stifel. Andrew question from with Your

William Carter

I the ask look a little base. X-year to -- if quarter? just implying moved had same-store that actually XQ the like be messy that same-store coming second and look were I wanted kind know of an it to of have comp at have if potentially much you're 'XX Or of XQ in may at XX%, that you being which improvement a and comp, noisy 'XX from was rate here single-digit stores XX.X% look time in improvement? -- can going XQ a XQ, you of down in I think X-year down you too and in you because I improvement of the kind But the at sales low out you're sales first down is this to expect

Darren Lampert

that, with I'm going to finish have start it. I'll Greg and

Gregory Sanders

Yes.

nice Andrew, talk -- here. So you to to

on we the sales us, improvement expecting For in comp are quarter. our number second

our we it's whether could do a right exactly number now help against of that us. the number quarter. think comps We're the quarter last QX what solidly quarter in statement. terms place which expect I guiding will to another not. well, improvement, advantage at first perform or we In we're against that a than versus year that and up first to that digits make of year for expect be, But prior second as better is don't we single better

Darren Lampert

started of the on had Andrew, look We at first months first quarter. when probably sales from other March side you deteriorating of trend. first strong that, our our couple in we comps that Feb pretty a quarter, of

with on So do a comfortable sales. same-store pretty go-forward basis we feel

William Carter

enough. Fair

you the last your not Second you're Or and want as anything ask kind of know have them, specifically. to execute looks yourself I of view last peers inventory whatever speak you comments if buying game obviously, But kind to is things do industry, just industry thing made assets around It week, I one of happen you at to how in your participate? do suppliers, several for looking to like to plan? bolt-on. wanted you reported can combinations. is, -- going call it

any there would Just of helpful. be commentary kind

Darren Lampert

at here. The out in investors, day other and we're over the X,XXX that when tremendous GrowGen. thing, with recognition private We're we a built been this a look XX years building we've brand transactions wonderful Andrew, you doing have GrowGen, at over label industry division

GrowGen acquirer, and stores X front. year, on beginning. is this an back the we're already year just is the acquired acquisition We've

cash believe and right in of wonderful of a now, the But position. best we us, $XX million for our it's interest inventory, So million in bank in do we're $XX we'll always shareholders. what's the

GrowGen in and live years, country hydroponic dominant XX say we the And eyes look be force were indoor your to gardening still if both in in. will you in and I close the

in right position we're XXX% we're comfortable So now. with the

Operator

Global with comes question Aaron Alliance Partners. Grey next from Your

Aaron Grey

and that the ahead off question go back first. I'll jump last of

Just the front. M&A on

off you So Or at as out there's diverse something are gardening? of can year, give any you store acquisitions? you commentary think well? strong beginning balance helpful. primarily on there? acquisitions indoor different there's been some appealing the part the vertical would of either see first when be more Do Are what kind storefront Just this front, sheet. be verticals seeing further that at we the Is looking or hydroponics it more the might you via on

Darren Lampert

Yes.

-- side GrowGen profitable now on the back I'd growth, a the outside competency to hydroponics getting for see the on gets I with, starting think, area, within now. there's GrowGen thing gardening company company the gardening -- acquisitions now the the to are And verticals indoor in gets #X back see this But side. is We And be of there start and to of profitable. it's that profitable there out CEA #X acquisitions Aaron, hard-pressed are believe this back right hydroponic do getting area. right product core our it. side space source we're to until right on lot tremendous

probably you it's players there out, certainly lot industry, disastrous has as after in the this to went just that to and of a of getting service sheet industry, are the know, And and the GrowGen harder it. do growth skill couple years The right of balance a now. customers

care and Coast distribution building customers. finished in take square East just Midwest basically feet XXX,XXX We to of of our Ohio

GrowGen of launching building July. distribution. So at our out is system the ERP We're beginning

year. an I may but see that again, So look that for we this again, And customers. end-to-end we've elsewhere, highlight we've built -- our built you'll

Aaron Grey

helpful. that for detail. Thanks That's Great. Okay.

for Second me. question

number of what there, numbers You talked on were coming also licenses of renewal that for from were states, in California, some to year. those and want further that are color in rebound at just year, a so of being renewed some outdoor end are the those get this of I half the seeing first that renewal you're not about last the

just So further you're of and stabilization in terms outlook in California in what color any specifically your some there? seeing

Darren Lampert

Yes.

We are California. seeing stabilization in

closures of understand the also growth to it. when You hydroponic side on closures of you're it, on have the side seeing you're seeing

space. and from business also within taking the are going the we of of some stores are of So stores -- California our business from some other that out

a in outdoor seeing are California. pickup in our stores We

for sales a of last versus We few also had positive our year. stores California same-store

our that the So are are from we've starting California better we starting customers but we products. from highly perform much are then we certainly, of sales are people to see it hearing and than surprised. our stores to grow expected, And

Operator

question Group. Your Eric next with from Capital comes Lauriers Des Craig-Hallum

Eric Des Lauriers

focusing same-store sales one, on again. First

to really when some When sales just with any here, sales durables to do I'll see It in kind do wondering mentioned California. between some we'll -- more trends out lighting when kind guess call goods can of consumable Like same-store are drop you some parse nice goods. comps? same-store versus looking a just from figure that HVAC? durable significantly in improvement consumables? there And -- you actually starting on lot since like of see off of well. I seems Not sales ask you should those mentioned get you're any on you same-store if as So versus QX expect anecdotally, any specific So seeing a of last guess, just that those standpoint year? but respect in I'm positivity California, easier geographic help color if you're for we like out as when did kind trends durable if well. the I a to goods and

Darren Lampert

starting XX% XX-XX our and refresh other to the crazy build-outs to growth are tremendous, going side. to durable we're states. Coast tremendous again, about periods. the see, the we markets the New Jersey now be from electric in the in on right There's seeing Yes. XX% are Right And on now, It companies. consumable we on rebates on cycles. see But side, starting East LED some during used some

now lighting LED starting a even. we're right see on So to pickup

We build of board. little, very So out it's year. again, last across the did kind

important on But part weekly, consumables. every basis. at small it at weekend of now. a XX% customers comping a very of the we we're So always business, our are us is number monthly Those look right more repeat

of of our part part business. margin So our a business, higher the more that's important

going equipment. out will new always and this that you do legislation. rolling And year cycles new on legacy pickup some and through we of there need out that that start refresh the farms hope states of So with seeing cultivators believe

of but it's So we better. it an as kind see ongoing getting situation,

Eric Des Lauriers

great guess sort I of talk is hear. private brands I'm of different you're of in is where getting are on performing about that dominant be a My a you your categories if where it's on seeing can to different That's union you're categories. different categories turnover are categories? well. continues how of there opportunity I to next the state label private brands other if guess label overall significant kind kind in question the of other brand there. as seeing what at And present maybe private there sort some where label versus it just brands might

I on brands and to union attack it's an within the private different guess kind of the kind your ability that overall So state of categories with kind of of then label?

Darren Lampert

Yes.

highly I in think it's competitive nature, unfortunately.

XX% as XXXX suffice label private say Street. Wall But are category XXXX. it bring XX% will don't to to for from sales our division, up want break continue customers usually to our we them. that to they to for sales we down Our products from And

and R&D for R&D with us. California lot of tremendous in that a firms work have We at group GrowGen, out the a do we

what to. thing with grow. we always and what say, We want, in of lot and So again, customers agnostic product one new look customers as sell our brands The their choose options always ways. they continue our we to will bringing GrowGen, we we're to choice, a

Eric Des Lauriers

the I to this label guess label new of expect just year? kind simplify could I should kind brands existing Okay. categories we Or of weight private question. just for new Should GrowGeneration brands? expect its more and private put if behind And Great. we

Darren Lampert

we new of do. That's rollout continued products see from what will You GrowGen.

the customers a our we to relationship of out will continue our So growers and do division GrowGen wonderful with innovative we that we ability, products best and our again, the a hopefully want. we service private label have at roll to But vendors. have

Operator

Instructions]. [Operator

Your with from ROTH. next Fortune question comes Scott

Scott Fortune

projects east. biddings that Darren, in of saw you commercial an and uptick in back mentioned March last quarter kind you

Just And to trend in growth you the here that little a continuing in from new going kind of on with in a us? pickup that how April want for expect of forward east to you at a of second look coming more first in expect sense subsequential through bit get kind half. these standpoint. in for back that's How here do of but do states board the quarter, this kind mind, you and

Darren Lampert

now, We're think this X.X to industry. I Scott, quarter. it's into really the hard right second forecast months

So the second much quarter becomes easier.

looking we're and of So of comps half at April May.

where growth in kind easy of sequential quarter. it's and So right are you'll get to for call that make an see second us understanding now a we the

shall It's that rather but us very of calling early saying it's heard give to not believe We companies much of this year. it public call. strong goes. you're it going back certain just the couple not for we're We've and yet, industry, a fourth half from to they see We quarters. how of months true. to before see the the in We're third as not that certainly endorsing other too a

to that of end positive going sales tell do the get turn the see see you'll year stronger. you to want before comping We're sales. a against see We turn very, continue same-store into that and to certainly again is believe that I very the I really year. going minimal can

So we on guide August. now. you'll hear call feel second quarter probably us But confident right in our

Scott Fortune

the are any projects I kind as commercial follow-up look at area, all Midwest, of as Georgia, are area, focusing just Connecticut, board, And be kind take right? the that And out there on new on of of as And east. if store you what it kind have opportunities, Missouri store your you a Maryland, the new of on back it. kind far adds? hearing you'll building come geographic sense Got of

Darren Lampert

quoting deals. Again, we are

on It's working wasn't there GrowGen because and all business in are deals it back incremental year. last We to Jersey east.

consumable once the So facilities we with these built. products also that, get are

in a And division. our So are every rebuilds. day. commercial pickup are It's up seeing picking we also we to see starting

seeing, and California in Washington and also. are We rebuilds in again, Oregon

right more durable saw We're are month up. by So pick now. year. month. we business last seeing very We little much seeing business more -- seeing We're

excited, again, to we too get excited, are that -- So are too early but Scott. we

Operator

question with comes Brian from Your next Oppenheimer. Nagel

Brian Nagel

follow-up. time I about I a we So just -- spent Q&A, talking lot a of we the this mean lot know of trajectory a and -- sales. recent

impacted So extent of I from to and solidify it. just we the -- that categories can could of just we home-related the in see second mean. some to half [indiscernible] want if heard others the weather kind We I March. of what sales

And impact either specific little So QX you're there sales? weather to into as GrowGen? and then as have what seeing as the you a I a at through more all at question is, comp far then was could QX be here,

Darren Lampert

I this right stores, we our outdoor Yes. see can of are a we see Brian, and in weather and pushed thing Again, pickup. outdoor other to the the we're out you is we're growth that outdoor tell month was starting seeing And season pickup seeing lot May. areas probably impacts west. which didn't back late in growth and California a the on a areas March the season only month now April one a into

Brian Nagel

want you specifics the we're numbers that do to get more to more of you want talk Darren, seeing? -- on kind

Darren Lampert

we same-store early. but too in a don't don't we stores. I our sales think pickup We -- calculations, are it's do seeing do just again, outdoor -- it's daily

Operator

from comes question Ladenburg. next Your with Glenn Mattson

Glenn Mattson

year, I'm some the working And going to you probably maybe of losses. operating benefit -- the talked aggressive to can comfortable acquisitions modest sense for of trying just be cash there understand this the for CapEx what you would of of the trying to reduction sense of model kind capital the aggressive not time? trying and have going to give just rest of you're get and a just front. that us But then -- also how to the feel you to level with more about how aggressive we're more at what And be? is making on getting cash a

Darren Lampert

Greg, do to I'll you finish that with it? and want start

Gregory Sanders

Yes, absolutely.

very investment through was million is we balance capital We as believe cash right So flat believe move investing quarter-over-quarter, sequentially have our We and income. cash where from operations. sufficient generated the we year. the in $X.X income sheet. generating returns position excess on now in we interest We're

fill right and the white Michigan to going and We to already. to upon transactions that the in table. this space added transactions quarter M&A at looking are Jackson, are within to We continue Bozeman come the execute organization

continue we'll at that deals end. to on look So

as investments the technology business continue the maturity. time primarily our can this of businesses far to automate in to where cost functions in dollars As going lower are we doing to move point forward we are and at in as best CapEx, towards as

balance and quarter. could tight sheet You number between we management to terms inventory terms what nimble and in million in possible model a $X the a of million That's of expect continue where in to and business. spend, $X be being incrementally the lowering management of our of we'll generally our

want if add that? you Darren, to to

Glenn Mattson

can distribution sense of like final done been kind that give how you the looks? build-out us what's of has just complete? there And and a center footprint Well, complete is -- the

Darren Lampert

Yes, complete. the is Ohio distribution

Gregory Sanders

Sorry, go ahead, Darren.

Darren Lampert

Glenn, complete. Glenn, the Ohio is distribution

Operator

concludes lines. you call thank and today. participating ask your that you your for this please gentlemen, disconnect We Ladies conference for and

GrowGeneration (GRWG) 9 May 232023 Q1 Earnings call transcript