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Cronos Group: What to Expect from Its Q1 Earnings

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May. 3 2019, Published 8:11 a.m. ET

Cronos Group

Cronos Group (CRON) is scheduled to report its first-quarter earnings on May 9 before the market opens. The company’s earnings are highly anticipated. The stock has taken a significant beating in the past two months. Let’s look at analysts’ expectations for Cronos Group next week.

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Sales growth

In the upcoming earnings release for the first quarter, analysts expect Cronos Group to report sales growth of 7.1 million Canadian dollars, which is ~140% growth from 2.9 million Canadian dollars in the first quarter of 2018. The growth will include sales from recreational cannabis, which were absent the previous year. The sales are expected to grow 27% sequentially from the fourth quarter of 2018, which included recreational cannabis sales.

Margins

Cronos Group’s gross income is expected to increase to 3.21 million Canadian dollars from 1.9 million Canadian dollars a year ago. However, the company’s gross income growth isn’t expected to translate into margins growth. The gross margins are expected to be 46%—compared to the gross margin of 65.5% in the corresponding quarter a year ago. Sequentially, the margins in the upcoming quarterly report are expected to expand from 43.9%.

Among the company’s peers (HMMJ), Canopy Growth (WEED) is expected to report a gross margin of 25.8%. Aurora Cannabis (ACB) is expected to report a gross margin of 53.7%. Tilray’s (TLRY) gross margin is expected to be 25%.

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