GRWG - Earnings call 3 2023 | GrowGeneration Corp.

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Operator

Hello, and welcome to GrowGeneration's Third Quarter 2023 Earnings Conference Call. My name is Ji, and I will be coordinating your call today.

Following prepared remarks, we will open the call to questions from analysts with instructions to be given at that time. I will now hand the call over to Clay Crumbliss with ICR.

Clay Crumbliss

Good afternoon, and welcome to the GrowGeneration third quarter 2023 earnings results conference call. recorded. being is call Today's With us Mr. are Darren Chief Financial Co-Founder and Chief Sanders, Greg and Officer; Officer Executive Lampert, of Corp. GrowGeneration

forward-looking those or these detailed for SEC release call, cause use to actual differ GAAP refer issued based These on have Investor Private the with available current the Securities today.During should as made to our Reform forward-looking of of the business earnings results statements concerning today. are access non-GAAP the provisions risks filings website. could information XXXX. after measures made Please release are risks any This company's a closed the ir.growgeneration.com.Certain to available filings Relations other and the website statements. that expressed beliefs today's to section and which are harbor implied safe from and cause uncertainties the The SEC in provide directly forward-looking in and press forward-looking most the that You the statements discussion we on the materially well all release, the differ subject statements, is management's of market from to several non-GAAP measures this at Act expectations third Litigation events as could include we'll performance. to as of reconciliations described earnings financial future results describe GrowGeneration measures press financial are comparable the press some those on which quarter actual on comments of subject materially call to

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

to additional queue time Co-Founder will please our questions, them over and turn will and If as we the Darren CEO, Darren? the call have Lampert. you allows.Now I take reenter

Darren Lampert

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

entire seem one each liquidity at XX% system million, our have July revenue on challenges work, our growth and and a of in in continued and strong continued GrowGen. points thank to communicated continue call. for our their basis no GrowGen's versus prior quarter X I'm extensively margins to of want consistent full we favor, our drive I for it generated cash floor to definitively decline support ongoing sufficient for with XX.X% does potentially in have financial the company balance we net approximately remains strategy. XXX distribution sheet. million to proprietary our of across all points the not operating $XX.X legislative more GrowGen equivalents hard with of of with putting second flow.While President. our of of East third cash, of margins the XX.X% XXXX, always, future As second expectations heading XXXX, Year-to-date, team over third employees made for center the their million which progress then on of quarter marketable favorable. have Committee to steadfast improved and quarter has happy of quarter generated Senate and the to on our of the I grateful basis XX.X%. inventory quarter SAFE comparable for in including and We quarter a for second the industry, ended and house, to with position being the discuss brands. new on dedication investing to from approved, reform the pleased vote while the securities, of launch and cash we the There Despite federal our profitability which the growth represents getting renewed executing results, and year's profitability, our we quarter ERP $XX.X be of $X.X company's is success to am gross the with the do.In forefront debt agenda and past, our we Senate $XX federal discussed optimism Act Gross third a the if improved I'm region moved we passing XXX in the banking the million

Services around cannabis hundreds recommended remove the I of is III, cannabis Department from penalty licensed the there Schedule cultivators back and Health of dollars tax importantly, rescheduling bringing millions excitement after XXXE industry. into to building which rescheduling More the would of cannabis Human on

that provide expect our X our this main primary focus. our said, that industry.With will remain for We a tailwind major initiatives

are what means last continuing new #X, that brand #X, at the ERP we we practical innovative to bring growing and profitable As on we our a to each on and and in growth. we're proprietary these. expansion attracting our products building upon is putting And terms are profitability launch focusing forefront, quarter, discussed larger our base; of portfolio, transforming digital #X, customer market and margin technology Briefly platforms.

anticipated solution in XX% quarter to around includes include an of expansion selection our in the includes [ nutrient we XXXX, seeds. of introduction product and pruners and and harvest We're results. with of to Product sales XXXX. beneficial gardening quality. solution of which satisfied of to kit, the proprietary cost-efficient products remain rolled out soils, range powder million portfolio the released of Power a ] entering bids, we and growth XX.X% well QX, The granular committed QX.In fertilizers expanding consumer bolster our our the very as delivering Drip coins Char is a curated we plant Proprietary e-commerce of the and for as retail second Coir accounted while QX, the propagation company, are coco advanced First, initiative and is raised, launches e-commerce not diverse compromising for sales, market. from retail an in microbial in the the distributed already $X.X a organic brands, be health on nutrient overall enthusiasts new much of up gloves that quarter line premium GardenintheBox launched optimize solutions guarding with Si all-in-one the finalizing that metal third

initiatives, introducing progress has mobile technology ERP remainder in been and date. addition our it impressive minor, single-tier Ags expect in QX.Second, rolled revenue, mandate cost We're through benefit of margin systems credentials ERP and our our the technological through most execute benefits continued to of will out and through our XXXX. the grow not and our before our across have and business and we efforts further to advancements additional take during many been believe bench develop margins opportunities strategies savings has To growth, with third, been rollouts, stores. time our system whose obtain growers Senior been indoor a our team to a strengthened of made key a XXXX trade transition. of have VP solidifying leadership us challenges, but verticals. greenhouse profitable infrastructure.And and relatively and MMI confident other expansion continued will ours for to we to we which we've the issues for our are optimization to the pleased flow constantly fully and and has Lastly, prioritizing Like through materialize, without their manage its analyzing consolidate all we team we includes key encountered ability Technology, Encouragingly, the are digital and internal comes are with the that with who business we

We performance to we of analyze these the quarter be expect quarter in lower to That the finalized of to of in in we and the efficiently.Turning now guidance closed full phasing low-performing redundancies locations and retail to to we third said, a quicker from to process recently locations year executed high-demand consolidating allow in-store us of in distribution products XXXX. respect our implemented and and in on X consolidation a expense QX storage, ensure expect All X Further, continue we SKUs. levels customers operating our nonperformance. the focus are retain system, efforts, and locations revenue and the part footprint to are additional we consolidated will closing positioning As and with stores operate for key reduce deliveries. us current consolidated centralized in and The effectively will inventory these shipments our SKU base rationalization executables on out November. basis. aim fourth with that and the more

adjusted range the $XXX to million.With EBITDA CFO, loss the will minus We that, of are Greg the $X million of of maintaining and million net to revenue our our call over Sanders. in million guidance $XXX in range turn $X minus I to

Greg Sanders

$XX.X updated our third our results, quarter, in afternoon, the revenue will GrowGeneration a XXXX, I financial versus you, of Thank full XX.X%. million representing guidance.For discuss I address and good and approximately $XX.X million everyone.First, year generated Darren, quarter of of quarter third decline then XXXX XXXX the third will

Our comparable in the modest the quarter. third year percentage for a XXXX year $XX.X over same-store quarter ago quarter million, decline to prior against a of third same-store basis. represents the on sales prior were sales the compared a million representing of sequential XX.X% Comparable sales $XX.X quarter improvement

of year-over-year. million generated year Our representing decline XX.X% a versus ago in period, division revenue e-commerce million $X.X $X.X the of

of transactions of ago quarter to due sales the Our in representing distribution revenue, year the percent in sales in in basis $XX.X the of largely third to to period. to margin few was year an was to of XXX the quarter is ago of third largely which profit the period, year XX% for the the margin large quarter which proprietary gross ago million period. ago compared XXXX in third improvement XXXX, of XX.X% versus in a million for quarter was of increase attributed onetime revenue as $XX.X year and points a other of decline The increased the the sales period.Gross brand a improvement XX%, XX.X%

we the in a ago notably cost depreciation amortization not various business the quarter.Store quarter Depreciation that to on the as balance benefit tax buys development year to were The expense service XXXX more through expense. of X. of quarter. the in the third in company third a new Additionally, expected quarter the in recognize margin its $X.X the reductions intangibles of reductions quarter achieved distribution in in being SG&A $XX.X million or the was and our are In operational reduction. to place year third and $X.X and systems other is year-over-year. rate year-over-year through to with the expense XX.X% primarily network tax million third of million go-live that for a expenses and is count personnel costs further first costs We ago declined or third are store not is million income attributed $XX.X controls, assets primarily upon reductions at quarter the bulk in the execute to into from period, assets has realizable. the performance representing are company executing July million million X% and administrative general expense. personnel. of to the increase date compares tax XXXX led expense efforts period. XX.X% XXXX, third quarter XXXX, improvement in we year which of due the favorable an into $X.X the the were to representing gross did and using This quarter the deferred operating the most expect SG&A in through our believe of GrowGeneration to compared to of rationalization our be sustainable, savings $X.X XXXX.Selling, of The

had excludes and $XX.X the depreciation, compared sufficient loss seeing company negative for the $X.X to in $X operations where loss to prepays our the the share representing the or for or quarter $X.XX by of which balance tax reserves improvement.Related increase market short-term, September $X.X XXXX. $XXX,XXX year its such, of $XXX,XXX Cash against of for deferred of company the third was negative said, a third company XX, XXXX.In million proprietary per used equivalents the share established $X.XX $X.X a accounts taxes, investments from September to in EBITDA, decreased has period. its are was cash, amortization, company company million, primarily charges XX, quarter The demand the the to operations at which quarter compensation, XXXX, million decrease the of XXXX in million, aforementioned of Adjusted our company second branded $XX As second full valuation quarter. over money a positions to share-based restructuring prepaid third generated loss a the net of held $X.X marketable allowance assets.Net the securities ago with investments. inventory third third million per as a XXXX, by $X.X sheet, million of to and related a quarter, cash $X.X total loss inventory of positive of million to compared compared third the Year-to-date, in in was million. was the million cash increase. quarter, low-risk the products we the $X.X in has approximately quarter quarter primarily increased from That approximately million interest,

we quarter, As drive and events The look help to inventory slow-moving we turns. the upon for fourth company the overstock to to additional position instituted and quarter has further of sell-through at promotional in fourth aiming are inventory. improve inventory reduce sale the

gross expense and improvements in transitioned and ERP, entire our our improvement warehouse the quarter, we're into the we in the corporate Operationally, new quarter. During business point-of-sale by see continued retail margin management systems. we operating encouraged to structure, and

change As a management quarter.Now XXXX on our very were large in such, adoption and full user outlook. the moving to focus year

and rationalization reaffirming year are lower revenue business long-term minus controlling navigate strategic focused into XXXX. range XXXX profitability continue to our be $X adjusted sheet of ability top to efforts be and we Positioning $X from to a we'll with the initiatives.In EBITDA remain to continued communicated $XXX shareholder million expenses industry costs believe We in continues million our through should full and in stay our be return operating fourth minus driving in value. managing of We the for profitability million summary, previously and the between to long-term the the today quarter to million. inventories confident balance business full our year to $XXX benefit and loss guidance and on priority to the and

capital, we capital allocation opportunities disciplined and on see to long-term to return approach approach invested planning. Our in focused a remains on

reiterate propel our cycles. value We through to to are development over long-term base to sharp continuing will expand daily invest invest value. products closing our broader business initiatives company transformation the With I our Darren into in and that capital the mandate and a for with business of continue shareholder to profitability back is we future proprietary remarks. digital customers.I'll of focus strategy our that proposition that, to executing Further, on turn a call

Darren Lampert

Greg. Thank you,

footing GrowGen strong to and line on a liquidity the balance solid is position. questions, sheet, open we I your Before for cash a healthy want reiterate that financial solid with

to We manage growth, on and continue to sustainable current our business emphasis profitability. prudently the industry landscape with expansion an margin

continued what our in interest you by and profitable thank remain more and encouraged time today, to GrowGeneration. on for control your are you laser-focused build a and stronger, nimbler We can progress we continuing continue company.Thank your for to

We will Operator? take now your questions.

Operator

Aaron Partners. from Instructions] Global [Operator from first Your Alliance comes question Grey

Aaron Grey

So of to first potential most question some I just for rescheduling to talk notably, the me. want Schedule about the III. reform,

right of your the now, are. being XXXE tax For maybe indirect of a by but clients you impact, guys, not obviously, more an impacted lot

impacts scheduling that of of have could on have and you removal back III you Schedule and some with you're your from XXXE, particularly how about on initiatives how indirect players that. guys benefit change could pulling do direct So potential that of could think CapEx

Darren Lampert

also facilities balance into lot probably I start and going will currently. quite that, lot back now. onto We've strengthen a be dollars balance on XXXE to life years becoming And to And There's to refresh there's penalties MSOs do know. from they believe sheet if of couple out into be dollars. with sheets. of needs will going to Aaron, And a back of lighting products hundreds we're schedule, coming. industry, And products this into of they single-state next the expansion expectancy more right with talking out of durable operators money the durable seen as we so in we'll the and large facilities now find coming with to the you millions And coming we of mean, many tremendous the importantly, cycle build-outs facilities. refreshing upfresh go and right the it there millions money DUs the XXXX their tax think of a of of use, the it a the I hundreds spent lot XXXX. being and exciting. industry that LED of I

we So are quite excited.

you As butter is out bread commercial know, GrowGen's operators there. and the large

the of So a we coming business it get will with out believe goes the XXXE of away that we and a majority lot rescheduling. if

about something. months, got be of the excited and all we're So it, should our we And in couple hearing crossed. we we fingers next know, like

Aaron Grey

can one there XX with kind that sounds you'll quarter. now. upcoming second the of me, then be you bring that do feel fleet, some the maybe what might store the for at two, like a X And in you same-store be of and XX on level about XX% on the provide just fleet hold consolidate on X It Great. then store up at pro Number how sales plan that Okay. down open Could one, the another kind to the in to be forma maybe will some smaller growth what And new number XX XQ? decline. opportunities stores? including new basis

Darren Lampert

send over then I'll Greg. start Yes, to and it

stores down to brings With XX. and that the X us there,

the counting double you're X. So

would those stores the talking were consolidating them. stores of already midst at about closing month, down X the We've we XX bring to with in XX. that So we're us this shut

more the and now. POS The at build-out success need have to in also brings label And now small our private center distribution launch don't in a our We're of XX. of system, product much in the us stores warehouse. of it. that the starting portfolio. right right do much as do the down Ohio, becoming with to to way we're our looking And it ERP the of So amount still efficient. and work see We we're brands

just XX planning Our the reliable. within at X during I bought footprint. the what better. when months. you those XX majority stores, the miles much stores, much most was of think, acquisitions. it within weren't were They don't more need customers smaller And But And we've acquisitions, that, X we in stores last redundancies and through within are store. last or the were X the They're months, look closed them with main a another take XX of

We tremendous back now. staff of consolidation believe pretty be accounting. the closures, So store comfortable through office also we right that not through but will there only feel and savings

X. it's have that we've the So to you that? twofold for we that closed about the opposed look to in stores you accounted anything add to stores And XXXX. do Greg, when XX at of $XX business million closed,

Greg Sanders

at Yes. think a the throughout I the No, question of a performances to number inclusive depending the the spot procedures million, the month. quarter to see million that's consolidated think quarter in of well. comp point. approximately ceased And the is I fourth reduction the mention, where of just basis the the million And QX We on we've quarterly what by we've those on, on around around see down course and some $X operational some conclude isolation, expect this for of is activity of we'll did Darren. end as the in year to into that $X within and closing $XX November operations locations

at all-in point. that's this number for us So an

Darren Lampert

X in stores store in with X Aaron, stores Colorado, and Michigan little Washington. the in color, California, more store X just X in a

Operator

question comes Andrew Stifel. from Carter from next Your

W. Andrew Carter

should within the redundant Just bit the therefore, I build with Obviously, there more stores. cannibalization. want just that kind you're and closing lift a be the of to locations, some on little same

in cannibalization like a when absolute But quite think actually moderating absence So given of you it to a do of base? I the current bit decline same-store the think growth XQ return category, see is you back sales the could stores. seems in,

Darren Lampert

that bottom we along see year. believe it the next been I year. We've bouncing this

XX% the down Our the been for months range. sales have X same-store in next last

our commercial GrowGen believe the private And quicker customers to into products our of uptake We with that than a distribution other see being to going the I legislation We reschedule, country. coming restart. with a business products, to tell And of going it's better now, into right company be or lot will get and happen more in bidding that. and what's this do tell quarter are in right any you'll quarter for seeing GrowGen first it. XXXE, to store label the fourth now. is think But coming you this we can't year? money you I I if in going Can back industry. on I think able

we're where couple over over We the we the years. $XX last cost very million company. of the almost this brought cost million down over So brought of couple brought We of last years. levels down $XX inventory optimistic

company So the other hard getting at this expensed and we're working back get profitable way. ourselves

stores closed that penetration we redone. now, private know, right growth we of You think that and with the portion up our year. also sales lot the We believe into were too. them about at were stores. But will of label next And goes nonperforming a our XXs fuel XX% same-store that

W. Andrew Carter

like to in as this hours, wanted category that can stepping during Or Or cycle, where I last there false The I believe of you are closing be just the the ask necessity XX mile could from stores, as positioned of I is doesn't that ship he of Ohio. some XX, the well kind you'll have and mile. footprint, to therefore, category necessary. back, it the like with you're just last in you given back some the live step category in have with kind super Do reads accelerates? is it mean have question of isn't guess, of the What grower kind the a second trade-offs?

thinking the about this growth return to in prepared category. you're eventual those takes Just being and kind of puts as for

Darren Lampert

we launch positioned I GrowGen boots are think and on store in we forecasting always that like represent system, customers. better of label. our right markets. we've illegal with with And team, now look that see commercial the is from ground our the at our private When And we're thing to don't with where been coming of new said, the the ERP we've Yes. one starting counts, distribution much I our we're and than ever

markets. bread is So legal and our the butter

with more to going will it. back going to reschedule, a that see we company money the come So sheet, for GrowGen us to a believe business if do is balance make and on you better

private keeps we products us a to it will Drip it we're and for launching So seeing to optimistic continue again, year, where this through uptake year where GrowGen it's line continue cut that's through label brands the is this now. benching Andrew, from And To But to benching. right to our it be. products our part numbers powders and follow We're what our had the up bringing our We're of of a you've needs get MMI Drip single-tier adding market. Coir and us. tremendous right Nutrient needed the Char you're our first company, seen launching the onto that company, most exciting brands. We're quarter. now on

in of line, a to right the our you run excitement norm me.There company start getting morning ask people business, That's in So in if and up lot waking new but there's its it's out costs course. deciding at growing. go the now, and are the

homegrower rules there many are favorable seeing legal in very yesterday, growers single they and you allowing have you're also as license more in saw states in Ohio. out Ohio So that

we X still not right in on see probably be states, probably expanding, year. quarter but It's talking a Ohio we probably is this what GrowGen the will used next to X is store in or And stores better. forecasting You predictable now more you're will have. industry The from year. first

now right more us. for is less So

Operator

next your Capital And Craig-Hallum is from Group. Eric Lauriers question Des from

Eric Des Lauriers

mostly kind here. I up just more and of store license sounds unlimited here. stores on outlook like legacy It you're the on these following markets guess first consolidating

Ohio within mentioned couple here. a next you add the place a to that of is You look months might store

the continue Ohio Beyond expansion plans kind how or legalize, there have we a as Is call forward they to overall I of looking of going states in? of think map the extensive state just guess legalized so? here? or here, road states it this that expanding year should you you are it, following do are of kind other more for, of sort sort newly next

Darren Lampert

dependent are upon were rules Ohio states the rules. that legalizing favorable. the Eric, again, And the

have warehouse We Ohio. square in XXX,XXX foot

and it worked footprint something and tremendously did that's them of of Louis probably in couple We'll We're wait-and-see looking St. at ship this look York. customer only and bringing a Ohio in Maryland we the served from looking aren't at looking But believe but out we'll in buying we're New we We're will attitude. and umbrella Missouri into store other pretty that What do that we're looking are GrowGen to out for warehouses a still another we're we're states. us. inventory add now add stores some really if to our up taking Pennsylvania, XX Jersey. them So some and states states right need employees. New to comes now, hours. beneficial well store We within The closing. that our year and taking in, list right it. We're and in a to those shareholders, sometimes that for already is

just is do one it's market strong keep industry. the see So balance and see turn our in we until continue to goes. that thing wait will and But the see sheet the where extremely a that real we

Eric Des Lauriers

I helpful. appreciate It's that color.

me. for one Next

could XXs you private it's of maybe up a sales, overall into I'm I the Q&A caught sure, but think retail go here or year. a that percent percentage I the in label next as as of not think that sales of some

have get from of here. this sort need kind you've of new I know And if XX%-plus I be think just private that to willing an that's kind helpful. goals additional sufficient share increase could products you of percentage of you now level? a you a a label sales, proprietary to commentary. as of of in get Is you're longer-term would any you think where do just be to portfolio of previous Could of sort you expand bit handful introduced to brands here? that that line on recently that

Darren Lampert

Coir in kits entered have a work IGC doing [ rolling ] from out. We're Coir has in-house continue right we're of bring launching Drip launch new year. now mark year certain products a we out, had harvest that that what I next pruners started believe to to powders lot and coco a we be we roll space coins. Char just just the Char with Box that But XX% wonderful of us the into next into will Coir, Hydro Char XXXX, will we've propagation we the and also mushroom that company, Garden launch products with and through

So now, going private to right really coming it. side fueling on also fuel on of division. starting there's customers new lot And distribution it's and in stores our a to now right GrowGen our the what's label

we out it excited, you out year we're do believe So see will believe of right wonderful XXs the next other XXXX, there are there number We in do lot further to will believe we into that vendors and products from continue grow. now.

do somewhere So reach be that that when we up, XXXX, number. believe we we'd and probably fully number 'XX, to between believe grow that we XX% will XX%

Operator

Brian Nagel from Your next question Oppenheimer. comes from

Brian Nagel

question, as and an closing as perspective stores second you repositioning to have out, the call I a kind of this financial jump near-term to from within markets?And I late. apologize think apologize, is sales should So some these regard markets if reduction for is are how already with with expense a the these repetitive, may closings store implications closing, But well or exiting this then perspective? of the this just I'd you about loss just be laid we

Darren Lampert

that stores last XX closed, leading in we were weren't markets, we've The redundancies. they months, X Brian, the

XX of right and most store side of And in regions in stores majority within mark. a They close to we the From to we liked. which We well and what of commercial customers. stores a decent for business from will into out we're the was within or And best and the that getting the it, miles still have you best XXXX, we people it, another financial XX shop is we had. stores stores, and keep another is smaller depending it now of we with to the have on, costs. as that still were where fall. usually will And probably million When store we've again, $XX XX accounted of GrowGen revenue want as were about that's there's We not standpoint, off us. done performing that, upon believe XXXX. store solutions. cutting think a tailing somewhere a leases would look stock again, how markets those of of XX in have I believe that the homegrown best XX% keep, our going the the job

staff customers go these with customers our We're stores doing come work incentivizing keep the GrowGen. benefits customers. to of we before to store the contacting to giving next So nearest getting are to closing them and

a have changing understanding that get percentage track now, what an little but XXXX. we more Right for X it. of when for we we'll really we aren't kept, color So in guidance for probably months do guidance, we

comfortable but with with feel off we that, year. drop we're or fourth now very the $X for So you'll $X right guidance the probably quarter, million million

Brian Nagel

That's a I then question, very could. And as helpful, follow-up Darren. if

saying to in this, bit here. the caveat, But if margin gross the also margins Sorry, better that. better drivers I about one confirm we looked of apologize. how guess I addressed QX? But a gross should you then think

Darren Lampert

Greg, you that. can take

Greg Sanders

Yes.

I which points driver XX% improved basis, also sales on a the in from itself buys, as benefits, XX% factor. from XX% our the development to we've than some mix business, you out quarter products that, some On on made more investments price margin, from label the of independent private margin label as other increases then negotiating Separate some of to some slightly private primarily quarter-over-quarter any that of going the the as were off look larger business. the gross in I profitability and itself. at improvements SKUs sale larger recognizing our third we're of distribution see points our when focused retail X.X within starting of margin So into on the year-over-year, was and we're early as it QX the bringing we're portfolio from you're the bulk XX%. those of negotiating itself from drove and margin, XX% that think private signs label period within a improvements we well primary think to was

we'll this into very build optimistic that it. that very, go periods. there's how reported, of lot quarter But factors and were So to the we're into a continue on we with future pleased

Operator

from question next MKM. comes Your Scott from ROTH Fortune

Scott Fortune

see you the is of that can of I margin forward we equipment kind versus the a came how mix model with that. percent what but the looking there? Just on us think sustainable that Can equipment kind moving follow-up kind forward color to little improvement going consumables know side provide give sense consumables, a you're that you kind of or the from build which a see break down bit of it, likely just if with and rescheduling, mix? a little on of 'XX of in we increase it more

Darren Lampert

specifics me want Greg, take with you that? have Do do any to you it?

Greg Sanders

start, the more and a is mean lines, durables the basis in over Coir are in versus it Drip stabilization on I label what consumables which to last end you. just several Darren, our Maybe primarily Char consumables I'll we've certainly the quarters business, brands. and of pass private seen our over

think in brand time in point Char is best-selling this entire portfolio. Coir our at our I maybe

which quarters when mix, generally about XX%, XXXX seeing from in we're the a quarters build we've over higher a X you're activity. has So seeing X or at last and certainly been consistent of years end XXXX and as the the of XX% looked down lot business some or

And of point have Darren, to with you. this do of a supporting So over of consumables fair where the are amount business. the and we I'll it pass how at comfort kind baseline they're

Darren Lampert

build-outs side will just other that that we the question that, the resume, will rescheduling, There on tremendous of is a rescheduling refresh still there's come. into industry, with come Scott, coming. money believe and no cycle

But So the with tremendous believe that lighting on of are just now up start ticking seeing the that, in and it, people lift around right it, not of side durables rescheduling. DU tremendous rooms we commercial you'll a if not the on consumables of amount the on the products on do hopefully anticipation side of they've side will country a we see same, bidding up opening of it. closed. And certain stay start

has think we've of time we're of couple busiest the busy, extremely they've But that It's of to couple the right get been the we've done. takes the projects our better team been years. in last last quoting than different commercial it I much seen seen. in doing than years, certainly these amount much So albeit now is

Scott Fortune

base, the real some you where inventory pressure discounting out there? the kind of other, of, appreciate kind are just with that competitors, seeing then Great. color. levels obviously, here? know what's one that are Or or of that quarter? And level inventory I kind this you're of something things you normalized the $XX what towards like are targeting level have store at? inventory at you the the million your consolidating And And with still from I that playing with side on kind terms ]. focused looking then is getting inventory [ of on we are

Darren Lampert

Greg, I question say over that's one you. to would

Greg Sanders

Yes.

highly we're inventory, focused So on quarter. this

well. of pretty little loaded systems, which European new a bit that management our management heading on As in business. warehouse our went massive we we think inventory into we moved kind into piece change

times terms and quarter. inventory, what the improve vendors great inventory next like the quarter, We on than very things now color upon driving might continue of eliminating we then a to very, increasing. to there's opportunity still redundancies carry longer our their We looking the anywhere with that turns. we'll fourth there side inventory lot and adding have reduce probably our 'XX. in as for progress products have good of our that and as in we there's is and at look in now think we'll right more well label else on So think opportunity to have Where is domestically sell is lead through. fourth partnerships X-or-so-million demand we're we're that of But more call in private

Operator

[Operator Mark Lake from comes from Smith Instructions] Your next Street question Markets. Capital

Mark Smith

follow-up label, within your last like look a your from does there Just versus Darren, durables? of kind what of private one. consumables that mix

Darren Lampert

and our now in very GrowGen. Coir. successful. leading right is It probably Ion Char had I lighting Lights XX% a consumables would that private label year of is our and is now has But of leading it right side our now have say launch the on [ a lighting certainly this the we part ] XX%, quite portfolio brand tremendous quickly. right been And Drip about have growing brand, on

Ion. the the side So consumables. side you'll the XX-XX, durable we consumable on again, in include than thing some somewhere is lighting that people fans And will side. but or The from GrowGen XX-XX, believe that stay like durable on brand maybe see a more durables much only

a are seeing. has years that's many make the really have that industry. year, into selling brand X you're only DuraBreeze we We for MMI the The from the decent a to difference fan of will been and believe business, market years, single-tier inroads bringing we what bench next some

Mark Smith

some as that kind down seeing that market at far looking kind are stores? buying your you you're mix in said for are at potential you of see of And as know what's road, now. building? as strategy then what you kind we in growth And as closures I versus look M&A the right Okay. of

Darren Lampert

own in it, now, on We've haven't ERP with we Right order, system. especially our of been launch been getting XXX% Mark. house concentrating the our

So Certainly, the of X do back. us we've see on nothing seen next you've it. you side M&A had like quiet we But months past. in a believe year, will the

warehouses ship into of to still We of commercial and there's markets our that is large stores what will growers with don't the out anymore, going team it out there, a we centers and slowly do depends what working distribution commercial lot do come our We deliberately and believe them. on to there. can we're and our

now. right it balancing just we're So

what If nowhere year. leases, in certainly next you probably you've year you this but the seen of to dependent upon from X me, stores but will ask we'll some realm portfolio see add year, GrowGen the next consolidations

Operator

your And conference call there gentlemen, questions thank may joining, Thank concludes this you We at you. are and further your and now no for lines. Ladies today. you time. disconnect this for

GrowGeneration (GRWG) 8 Nov 232023 Q3 Earnings call transcript