MedMen Enterprises, Inc. (MMNFF)·Q3 2023 Earnings Summary

Executive Summary

• Q3 FY2023 revenue declined 23% YoY to $27.2M (continuing ops) with gross margin at 48% versus 49% a year ago; operating loss widened to $23.9M, driven by higher impairments and non-operating expenses .
• Management highlighted promotional “stacking,” blocked social channels, saturated markets (CA/AZ), and tourism-driven weakness (NV) as primary revenue headwinds; Adjusted EBITDA improved to $(2.1)M from $(3.0)M YoY as cost actions lowered G&A .
• Liquidity is constrained: cash at $7.6M, working capital deficit of $383.2M; debt defaults require extensions/refinancing, and strategic asset sales (NY, non-core states) are being pursued; going concern risk remains .
• No quantitative guidance or earnings call transcript was provided; restatement work continued and interim results were flagged as preliminary (material changes possible), a key narrative and stock-reaction catalyst .

What Went Well and What Went Wrong

What Went Well

• G&A down 35% YoY and 40% YTD via rent reductions, force reductions, and lower legal/pro fees; management: “our focus on reducing company-wide expenses” drove improvements .
• Adjusted EBITDA improved to $(2.1)M versus $(3.0)M YoY; non-GAAP reconciliation reflects cost actions and lease/sublease optimization .
• Strategic progress: sale of Florida completed (total $67M consideration) and proceeds used to repay $31.6M of term loans; second Illinois store nearing completion .

What Went Wrong

• Revenue fell across CA/NV/IL/AZ due to aggressive promotions, market saturation, and NV tourism exposure; CA revenue down 20% YoY, NV down 34% YoY, IL down 33% YoY, AZ down 21% YoY .
• Impairment charges surged (Massachusetts asset group impairment $9.7M; total quarterly impairment $13.9M), compressing operating results .
• Liquidity and debt: minimum liquidity covenant breach under convertible facility; senior term loans in default with added 5% default interest; going concern doubt remains .

Financial Results

Year-over-year comparison (Q3 FY2023 vs Q3 FY2022):

Revenue by geography (Q3 FY2023 vs Q3 FY2022):

KPIs and balance sheet highlights:

Estimates vs actuals: S&P Global consensus for MMNFF was unavailable; results comparison to Wall Street estimates cannot be provided. Values retrieved from S&P Global were not available for this ticker mapping.

Guidance Changes

No quantitative guidance provided. Management focused on:

• Liquidity actions: potential divestitures (Arizona, Nevada, Massachusetts, Illinois), sale of NY assets, vendor-term extensions, lease renegotiations .
• Operational discipline: cost savings plan continuation, delaying new store development, closure of underperforming stores .
• Systems: POS system replacement; impairment related to legacy system .

Earnings Call Themes & Trends

No earnings call transcript available; themes extracted from MD&A across quarters.

Management Commentary

• “During this fiscal quarter we also ‘stacked’ and ran multiple types of promotions during times in which our social media outlets and marketing communications were blocked or unavailable, and our in-store promotions ran without comparable added traffic to our stores.”
• “We are nearing completion of the construction and build-out of our second store in Illinois expecting to be complete in the next several weeks.”
• “We began the implementation of a new point-of-sale system… and recognized an impairment loss of $2.4 million.”
• “The conditions described above raise substantial doubt with respect to the Company’s ability to meet its obligations for at least one year… and therefore, to continue as a going concern.”
• “We plan to continue to fund our operations and service our debt… through cost savings, potential divestitures… and sale of New York assets currently held for sale.”

Q&A Highlights

No earnings call transcript was available for Q3 FY2023; therefore, no Q&A highlights or guidance clarifications could be extracted.

Estimates Context

• Wall Street consensus (S&P Global/Capital IQ) for MMNFF Q3 FY2023 revenue/EPS was unavailable due to a missing data mapping; we cannot assess beats/misses versus consensus. Values retrieved from S&P Global were not available for this ticker mapping.
• Based on company-reported drivers, sell-side estimates (if any) would likely need to reflect: continued pricing pressure/promotions, NV tourism sensitivity, incremental impairments, and G&A reductions, as well as potential portfolio divestitures .

Key Takeaways for Investors

• Liquidity and solvency risk remain central: working capital deficit expanded sharply; debt defaults and covenant breaches necessitate urgent refinancing or asset monetization .
• Operating performance pressured by macro/competitive dynamics; however, structural G&A reductions and sublease strategies improved Adjusted EBITDA sequentially YoY .
• One-time charges (impairments, restatement-related adjustments) depressed GAAP results; monitor magnitude/timing of additional restatement entries and potential further impairments, especially in MA/AZ/NV .
• Portfolio actions (sell NY and possibly AZ/NV/MA/IL assets) are catalysts; outcomes will drive debt resolution and liquidity runway, but timing is subject to regulatory approvals .
• Trading implications (near term): headline sensitivity to restatement updates and going-concern language; watch for press on divestiture deals, debt amendments, and POS rollout progress .
• Medium-term thesis: If asset sales and lease renegotiations succeed, reduced leverage and right-sized footprint could stabilize margins; sustained competitive pricing and tourism variability remain core demand risks .

Citations: All figures and statements are sourced from MedMen’s Q3 FY2023 8‑K and exhibits, and Q1/Q2 FY2023 10‑Qs as cited in tables and bullets above.