Please ensure Javascript is enabled for purposes of website accessibility

Why Tilray Stock Surged Today

By Joe Tenebruso – Jan 10, 2022 at 2:05PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The marijuana leader wants to build a global consumer goods empire.

What happened 

Shares of Tilray (TLRY -0.38%) jumped 13.6% on Monday after the cannabis company reported a significant improvement in its operational and financial results. 

So what

Tilray's net revenue climbed 20% year over year to $155 million in its fiscal 2022 second quarter, which ended on Nov. 30. The gains were driven in part by the company's expansion into alcohol and hemp-based wellness products.

Woman holding marijuana leaf in a field.

Image source: Getty Images.

However, an oversupply of cannabis in its core Canadian market forced Tilray to cut prices. That pressured its gross profit, which fell 7% to $32.8 million.

Still, Tilray's cost-reduction program is progressing ahead of schedule. Management now expects to realize a total of $100 million in savings by 2023, up from a prior forecast of $80 million.

All told, Tilray's net income improved to $6 million, compared to a net loss of $89 million in the year-ago period. The marijuana company also generated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $13.8 million. That marked the 11th straight quarter that Tilray posted positive results for this key metric of operational performance.

Now what

The cannabis leader also announced its plans to change its name to Tilray Brands, to reflect its desire to become a "global consumer packaged goods powerhouse." The company intends to bolster its Manitoba Harvest hemp and CBD (cannabidiol) wellness division and SweetWater craft brewing brand via distribution and innovation investments. Management says the moves will further Tilray's international expansion and prepare the company for the potential federal legalization of cannabis in the U.S.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.