MedMen Enterprises (MMEN) (MMNFF) reported its third-quarter earnings of fiscal 2019 after the market closed on May 29. For the quarter ended on March 31, the company has posted revenue of $36.6 million, which represents sequential growth of 22.3% from $29.93 million in the second quarter of fiscal 2019.
During the quarter, MedMen’s retail sales, which includes sales from 21 retail stores that were operational at the end of the third quarter, rose 16% to $34.6 million. The strong performance in Nevada and Arizona drove the company’s retail sales during the quarter. In Nevada, MedMen’s retail sales grew 34% sequentially, while the retail sales in Arizona were driven by the acquisition of two new stores. In California, where the company holds ~7% of the market share, retail revenue growth was 5.0%.
Expansion of gross margins
For the quarter, MedMen’s gross margin after biological asset adjustment expanded from 53.2% in the second quarter of fiscal 2019 to $53.7%. In California, the company’s gross margins improved from 51% to 57% due to the optimization of its merchandising and supply chain management and higher purchasing power.
A decline in net losses
For the quarter, MedMen has reported an adjusted EBITDA loss of $42.6 million, which represents an improvement of 3.0% from the second quarter. The company’s SG&A (selling, general, and administrative) expenses fell 9% sequentially due to lower marketing, legal, and human resource expenses. However, the company’s pre-opening costs increased $1.6 million sequentially to $4.6 million in the third quarter.
For the quarter, the company incurred a net loss of $63.1 million, or $0.20 per diluted share compared to a net loss of $64.6 million or $0.25 per share in the second quarter of fiscal 2019.