When MedMen Enterprises (OTCBB:MMNFF) announced its quarterly results in February, there was good news. Revenue skyrocketed by 864.5% to $29.9 million. However, the company has had plenty of bad news in 2019. The stock is down 17% year to date, making it one of the worst-performing pot stocks on the market so far this year.
But MedMen had an opportunity to change its story with the company providing its fiscal 2019 third-quarter update after the market closed on Wednesday. How did MedMen fare? Here's what you need to know about the company's Q3 results.
By the numbers
MedMen reported revenue in the third quarter of $36.6 million. This showing reflected a whopping 156% jump over the prior-year period and a 22% increase from the previous quarter. However, the company's revenue came in well below the consensus Wall Street estimate of $49.2 million.
The company announced a GAAP net loss of $23.7 million, or $0.20 per share, in the third quarter. This represented a worsening from the net loss of $18.4 million, or $0.83 per share, reported in the same quarter of 2018.
MedMen ended the third quarter with cash, cash equivalents, and short-term investments of $21.9 million. This showing reflected an increase from the $15.7 million on hand as of March 31, 2018.
Behind the numbers
California continued to be the primary focus for MedMen in the third quarter. The company enjoyed a 7% market share in the state. MedMen's California revenue increased by 5% over the previous quarter to $24.9 million.
But MedMen also saw strong growth in other states. The company particularly saw solid growth in Nevada, where overall retail revenue increased by 34% over the previous quarter. MedMen's retail cannabis store near the Las Vegas airport is now its No. 2 store in terms of sales performance.
MedMen's bottom line didn't look as great, though. Total expenses increased 243% year over year to nearly $79 million. This showing was driven from a growth in headcount and operating costs for retail stores in California, New York, Nevada, Arizona, and Illinois.
In addition to reporting its financial results, MedMen also provided an update on several other recent developments. The company has made several executive changes, including naming Ryan Lissack as its new chief technology officer and accepting the resignations of COO Ben Cook and Lisa Sergi, who served as MedMen's general counsel and was a member of its board of directors. Ben Rose also transitioned from chairman of the board to executive chairman to be more actively involved in the company's operations.
MedMen also slashed the compensation for its top two executives, CEO Adam Bierman and president Andrew Modlin. Both men agreed to accept annual salaries of $50,000.
MedMen's musical chairs in its upper ranks could result in some changes in strategy for the company. However, the company seems likely to keep forging ahead with its approach to expanding its retail presence in the United States.
In particular, MedMen still expects to open 15 new stores across the U.S. this year. Twelve of those are planned for Florida, a state where MedMen holds licenses for up to 35 locations.