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BODY & MIND INC. (BMMJ)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 FY2024 revenue was $4.4M, flat year over year, while net loss improved sharply to $0.2M from $2.7M in Q2 FY2023; gross margin expanded to 45.7% as the company streamlined operations and focused on Illinois and New Jersey .
  • Management executed a $2.0M divestiture of Nevada cultivation/processing to reallocate capital to higher-ROI dispensary launches in Illinois and New Jersey, citing wholesale pricing pressure and tax structure challenges in Nevada as a key rationale .
  • Operational progress: Lynwood, IL dispensary construction substantially complete with opening targeted in 1H 2024, and NJ dispensary advanced with local approvals; NJ annual license subsequently granted and building permit issued (Q3 update) .
  • No formal numerical guidance or Wall Street consensus estimates were available; S&P Global consensus mapping for BMMJ was unavailable, limiting beat/miss analysis versus Street .

What Went Well and What Went Wrong

What Went Well

  • Material improvement in profitability metrics: Net loss reduced to $0.2M from $2.7M YoY; net operating loss improved to ($0.8M) from ($1.4M) YoY .
  • Gross margin expanded to 45.7% vs 39.9% in the comparable period cited; management emphasized efforts “to improve financial performance, improve margins and streamline our operations” .
  • Strategic portfolio optimization: Signed definitive agreement to divest Nevada cultivation/production for total consideration of $2.0M to focus capital on IL/NJ “highest returning projects” .

What Went Wrong

  • Top-line stagnation: Revenue remained flat at $4.4M YoY, indicating limited near-term growth from the current footprint .
  • Nevada market headwinds: CEO highlighted Nevada wholesale pricing pressure and wholesale tax structure impairing long-term profitability, necessitating exit of those operations .
  • Lack of formal guidance and limited external estimate coverage: No quantitative guidance was issued; S&P Global consensus was unavailable, reducing visibility into Street expectations and potential market reaction .

Financial Results

MetricQ2 FY2023Q1 FY2024Q2 FY2024Q3 FY2024
Revenue ($USD Millions)$4.4 $5.5 $4.4 $4.41
Net Operating Profit (Loss) ($USD Millions)($1.4) ($1.2) ($0.8) ($1.34)
Net Income (Loss) ($USD Millions)($2.7) $0.2 ($0.2) ($2.54)
Gross Margin (%)N/A37.4% 45.7% N/A

Notes:

  • EPS not disclosed for Q2 FY2024 press materials; FY2023 annual basic/diluted loss per share was $0.15, but quarterly EPS was not provided .
  • Estimates vs results: S&P Global consensus estimates were unavailable for BMMJ (missing CIQ mapping), so beat/miss vs Street cannot be assessed [GetEstimates error].

Segment breakdown: Not disclosed in the press materials .

KPIs

KPIQ2 FY2023Q1 FY2024Q2 FY2024Q3 FY2024
Shares Outstanding (Period-End)N/A144,968,000 147,686,393 N/A
Gross Profit ($USD Millions)N/AN/AN/A$1.96

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2024Not provided Not provided Maintained (no guidance)
MarginsFY2024Not provided Not provided Maintained (no guidance)
OpExFY2024Not provided Not provided Maintained (no guidance)
OI&EFY2024Not provided Not provided Maintained (no guidance)
Tax RateFY2024Not provided Not provided Maintained (no guidance)
Segment GuidanceFY2024Not provided Not provided Maintained (no guidance)
DividendsFY2024Not provided Not provided Maintained (no guidance)

Earnings Call Themes & Trends

Note: No Q2 FY2024 earnings call transcript was available in the document catalog. Themes are drawn from press releases and 8-K disclosures.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q2 FY2024)Trend
Footprint optimizationFY2023: streamlined assets; divested Ohio dispensary and processor; focus on IL/NJ Executed definitive agreement to divest Nevada cultivation/production; rationale: pricing and tax headwinds Continuing exit from lower-return assets; redeploy to IL/NJ
Illinois expansionMarkham IL opened and growing; Lynwood construction advancing Lynwood interior/exterior nearly complete; opening expected 1H 2024 Near-term opening catalyst
New Jersey market entryLocal approvals secured; state license application in process Advanced application; demolition completed; building permit expected soon Progressing; subsequent NJ annual license granted (Q3 update)
Margin improvementQ1 FY2024 GM 37.4% vs 14.7% YoY Q2 FY2024 GM 45.7% with operational streamlining focus Uptrend continues
Regulatory/licensingNJ state licensure pending NJ building permit expected; later obtained annual license Advancing to full licensure

Management Commentary

  • “The most recent quarter reflects our work to improve financial performance, improve margins and streamline our operations to support building our operations in Illinois and New Jersey.” — Michael Mills, CEO .
  • “Nevada’s wholesale pricing challenges and wholesale tax structure made it difficult to see the Company’s Nevada operations generating sufficient profits over the long term... We feel the Illinois and New Jersey markets continue to be underserved and offer significant opportunities for revenue growth...” — Michael Mills, CEO .
  • “We are excited to be moving efficiently on our Illinois and New Jersey dispensary construction projects... we have executed definitive documents to divest our Nevada cultivation and processing assets... prioritizing our operational focus on... highest returning projects.” — Michael Mills, CEO .
  • “We continue to execute on our strategy of reducing our footprint and focusing on developing our most valuable assets... We believe the Illinois and New Jersey markets remain underserved...” — Michael Mills, CEO (Q3 update) .

Q&A Highlights

  • No Q2 FY2024 earnings call transcript found; Q&A highlights not available in the document catalog [ListDocuments earnings-call-transcript for BMMJ only shows Q3 2022] [22].

Estimates Context

  • Wall Street consensus via S&P Global was unavailable for BMMJ due to missing CIQ mapping, so we cannot evaluate beats/misses versus Street for Q2 FY2024 [GetEstimates error].
  • In the absence of consensus, investors should focus on company-reported YoY margin and loss improvements and near-term operational catalysts (Lynwood opening, NJ licensure) .

Key Takeaways for Investors

  • Profitability metrics improved significantly despite flat revenue; gross margin reached 45.7% and net loss narrowed to $0.2M, signaling early benefits from cost discipline and portfolio optimization .
  • Strategic exit from Nevada reallocates $2.0M to IL/NJ builds; management cites structural pricing/tax issues in Nevada and better ROI in underserved IL/NJ markets — a thesis-aligned capital shift .
  • Near-term operational catalysts: Lynwood IL opening targeted in 1H 2024; NJ dispensary advanced and later received annual license and building permit — supports revenue inflection potential .
  • Lack of external estimate coverage and formal guidance reduces visibility; trading likely driven by milestone execution (store openings) and sustained margin improvement rather than earnings beats/misses .
  • Watch for gross margin trajectory and net operating loss compression as new stores ramp and overhead leverage improves; Q1→Q2 margin step-up demonstrates execution momentum .
  • Balance sheet actions (e.g., debt repayment noted in Q1) and equity issuance under advisory agreement should be monitored for dilution/financing mix during expansion .
  • Medium-term thesis: focused retail footprint in IL/NJ with disciplined capital allocation can unlock growth and profitability as regulatory/licensing hurdles are cleared and store productivity scales .