GrowGeneration Corp. reported a significant decline in financial performance for the first quarter of 2025, with net sales totaling $35.7 million, a decrease of 25.4% from $47.9 million in the same period of 2024. The decline was primarily attributed to the closure of 19 retail locations during 2024, including 12 underperforming stores as part of a strategic restructuring plan. The company's gross profit also fell to $9.7 million, down 21.5% from $12.4 million year-over-year, reflecting the impact of reduced sales volume and the ongoing effects of the restructuring.
Operating expenses decreased by 10.2% to $19.6 million, compared to $21.8 million in the prior year. This reduction was driven by lower store operating costs due to the closure of retail locations, although it was partially offset by an increase in restructuring costs. The company reported a loss from operations of $9.9 million, slightly higher than the loss of $9.4 million recorded in the same quarter of the previous year. The net loss for the quarter was $9.4 million, compared to a loss of $8.8 million in the first quarter of 2024.
In terms of strategic developments, GrowGeneration has been actively restructuring its operations to enhance profitability and streamline its business model. The restructuring plan, initiated in July 2024, aims to consolidate operations and focus on key growth areas within its Cultivation and Gardening segment. As of March 31, 2025, the company had completed most of its restructuring activities, incurring approximately $3.5 million in related costs, including $1.1 million in the first quarter of 2025. The company anticipates annualized cost savings of around $12 million as a result of these efforts.
Operationally, GrowGeneration maintained 31 retail locations across 12 states as of the end of March 2025. The company has also focused on increasing the sales mix of its proprietary brands, which accounted for 32% of net sales in the Cultivation and Gardening segment, up from 22.6% in the previous year. The percentage of consumable products sold also increased to 74.6%, indicating a shift in customer purchasing patterns towards more frequently replenished items.
Looking ahead, GrowGeneration is monitoring changes in U.S. trade policy that could impact its operations, including potential increases in tariffs on imports. The company is exploring strategies to mitigate these risks, such as negotiating with suppliers and adjusting pricing strategies. Management believes that despite the current challenges, the company is adequately funded to support its operations and growth strategies over the next twelve months.
About GrowGeneration Corp.
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