Sign in

You're signed outSign in or to get full access.

ME

MedMen Enterprises, Inc. (MMNFF)·Q4 2021 Earnings Summary

Executive Summary

  • Record quarter: Revenue reached $42.0M, up 55.4% YoY and 18.5% QoQ; company-wide gross margin improved to 46.9% and retail adjusted EBITDA margin was 22.0% .
  • Strength in California: California revenue was $25.2M, up 24.4% QoQ, with Nevada also accelerating as tourism returned .
  • Capital structure repositioning: Subsequent to Q4, MedMen raised $100.0M and extended senior secured convertible notes to 2028 with PIK interest and loosened covenants; partnership dynamics with Tilray/Serruya provide flexibility to execute growth .
  • Net loss widened QoQ to $(46.2)M given a prior-quarter tax benefit; corporate SG&A rose QoQ to $12.1M though down 19.1% YoY .
  • Wall Street consensus (S&P Global) unavailable for MMNFF; estimate-based beat/miss analysis not possible with SPGI data.

What Went Well and What Went Wrong

What Went Well

  • Revenue inflection: “We set a new record for quarterly revenue at MedMen” with broad-based traffic and transactions growth; Q4 revenue +18.5% QoQ and +55.4% YoY .
  • California-led momentum: California revenue +24.4% QoQ to $25.2M, with Nevada strength as tourism improved; retail adjusted EBITDA margin 22% from continuing ops .
  • Balance sheet and capital access: Debt amended to extend maturity to 2028, eliminate cash interest, and relax covenants; added $100.0M capital via private placement to fund growth .
    • Quote (CEO Tom Lynch): “We added $100.0 million of new capital… extend[ed] the maturity to 2028, reduced restrictive covenants and eliminated cash debt service requirements” .

What Went Wrong

  • Net loss widened QoQ: Net loss of $(46.2)M vs $(9.7)M in Q3, with the prior quarter benefiting from a $32.7M tax provision benefit .
  • Retail margin mixed: Retail gross margin rate dipped slightly QoQ to 54.9% from 55.6%, while company-wide gross margin improved to 46.9% .
  • Corporate SG&A uptick QoQ: Corporate SG&A (ex pre-opening) rose 9.7% QoQ to $12.1M (still -19.1% YoY), as growth investments and store openings increased operating costs .

Financial Results

MetricQ2 2021 (Dec 26, 2020)Q3 2021 (Mar 27, 2021)Q4 2021 (Jun 26, 2021)
Revenue ($USD Millions)$33.8 $32.0 $42.0
Company-wide Gross Margin Rate (%)53% 42% 46.9%
Retail Gross Margin Rate (%)57% 55% 54.9%
Corporate SG&A ($USD Millions, ex pre-opening)$9.2 $11.0 $12.1
Net Loss ($USD Millions)$(68.9) $(9.7) $(46.2)
EPS (Continuing Ops, $)$(0.11) $(0.04) $(0.05)
EPS (Discontinued Ops, $)$0.00 $0.01 $(0.01)
Retail Adjusted EBITDA Margin Rate (%)17% 23% 22%

Segment and KPIs

MetricQ2 2021Q3 2021Q4 2021
California Retail Revenue ($USD Millions)$19.8 $20.2 $25.2
Arizona – Talking Stick Store Sales ($USD Millions)n/a$2.2 $2.5
Arizona – Wholesale Sales ($USD Millions)n/an/a$1.3 (97.9% YoY increase)
Retail Adjusted EBITDA ($USD Millions)$5.8 $8.2 $8.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Numerical financial guidance (revenue, EPS, margins)FY/Q4 2021 and forwardNot providedNot providedMaintained (no formal guidance)
Store openings – Massachusetts (Fenway)Fiscal Q2 post-Q4Not previously datedExpected opening during fiscal second quarter; Newton progressing (CY2022) New timing detail
Florida store expansion~6 months post-Q4Not previously quantifiedPlan to expand to 15 dispensaries and scale cultivation to ~40k sq. ft canopy Expanded footprint plan
Capital structure – senior secured convertible notesPost-Q4 (Aug 17, 2021)Prior maturity/covenantsExtended to 2028; PIK interest; covenants eased Strategic improvement
Equity capital raisePost-Q4Not applicable$100.0M private placement to fund growth New capital

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2021)Previous Mentions (Q3 2021)Current Period (Q4 2021)Trend
Retail margin expansionCompany-wide GM 53%; retail GM 57% Company-wide GM 42%; retail GM 55%; inventory write-down noted Company-wide GM 46.9%; retail GM 54.9% Stabilizing with operational improvements
California market performance$19.8M; capacity restrictions pressured trends $20.2M; rebound underway $25.2M; +24.4% QoQ Improving sharply
Capital structure/cost reductionSG&A reductions; debt facilities added Additional financing and deleveraging Debt extended, cash interest eliminated; $100M capital Improved flexibility
Regulatory/legal (NY divestiture)Operating 4 NY dispensaries; planning changes NY classified as discontinued; investment agreement AWH agreement noted; NY discontinued operations Portfolio reshaping
Geographic diversification (AZ/NV/FL)FL +43% revenue QoQ; NV tourism challenges NV recovering; AZ Talking Stick growth NV accelerating with tourism; AZ retail/wholesale growth; FL +10.9% sequential Broader strength

Note: Full Q4 call transcript could not be retrieved via the document reader due to a catalog inconsistency; themes reflect press release and exhibits .

Management Commentary

  • “The past quarter was pivotal… We set a new record for quarterly revenue… Strength in California accelerated… we… attract strong partners in Tilray and Serruya.” — Tom Lynch, CEO .
  • “As predicted, California began to rebound strongly… Additionally, we achieved the best bottom-line result in MedMen’s history.” — Tom Lynch (Q3 press release) .
  • “We have… maintained the support of our capital partners… gross margin expansion is a strong indicator… we plan to accelerate our growth…” — Tom Lynch (Q2 press release) .

Q&A Highlights

  • The full Q4 2021 earnings call transcript was not accessible via the document tool due to database inconsistency; publicly available summaries indicate the call covered revenue drivers, capital structure changes, and state-specific growth plans .
  • Management scheduled the call at 5:00 p.m. ET and referenced growth priorities across CA, FL, IL, AZ, MA .
  • No explicit numerical guidance ranges were provided in the press materials .

Estimates Context

  • S&P Global consensus estimates for MMNFF were unavailable in the SPGI/CIQ mapping; as a result, comparisons to Wall Street consensus cannot be provided via SPGI data for revenue/EPS/EBITDA (unavailable).
  • Implication: Without established SPGI consensus, estimate revisions/beat-miss analysis will rely on future third-party coverage or company-provided outlook (none provided in Q4 release) .

Key Takeaways for Investors

  • Revenue momentum is real, led by California; retail adjusted EBITDA margins (22%) and company-wide gross margin (46.9%) indicate operating improvements even as retail margins normalize QoQ .
  • Capital structure de-risking (maturity extension to 2028, PIK interest, covenant relief) and $100M equity infusion position MedMen to fund new stores and state expansions, a potential stock catalyst on execution .
  • Geographic diversification is working: Nevada is rebounding with tourism; Arizona retail and wholesale are growing; Florida is scaling retail and cultivation, with a path to 15 dispensaries .
  • Watch corporate SG&A and pre-opening costs near term; while SG&A is down YoY, QoQ increases reflect growth investments that need to translate to sustained revenue/EBITDA expansion .
  • With no formal numerical guidance or SPGI consensus, investor focus should be on quarterly delivery against stated operational initiatives (store openings, margin trajectory, state-by-state execution) and capital deployment discipline .