GRWG

Download the Complete Report Here Key Takeaways: LOCL’s 2Q results reinforce the transition from facility build-out toward yield, customer mix, SKU expansion, and operating leverage. Revenue increased 14% y/y to $13.9 million from $12.1 million and rose ~4% sequentially from $13.3 million, driven by higher production and sales from Georgia, Texas, and Washington. 1H26 revenue reached $27.2 million, up ~15% from $23.7 million in 1H25, extending the growth trend as LOCL converts higher output from its installed asset base into retail sales. Adjusted EBITDA loss narrowed 17% y/y to $5.8 million from $7.1 million and was broadly stable versus $5.7 million in 1Q26. The y/y improvement indicates that higher revenue and tighter cost discipline are beginning to translate into operating leverage despite temporary gross-margin pressure during the quarter. With the three Stack & Flow-enabled facilities already at full harvestable capacity, incremental growth is increasingly coming from better asset productivity, although further gross-margin improvement is needed to accelerate progress toward positive adjusted EBITDA. Food safety and traceability emerged as an important strategic theme this quarter, increasing retailer focus on the attributes that differentiate LOCL’s controlled-environment model. Retail sourcing conversations that historically centered on cost and availability are increasingly incorporating water sourcing, environmental control, traceability, and food-safety monitoring. This shift is visible more broadly, with FMI’s 2026 research indicating that 31% of responding retailers plan to add food-traceability technology capabilities this year, while recent produce-safety events have highlighted the commercial impact of supply-chain exposure, with U.S. fresh-lettuce unit sales falling 9% w/w during July’s Cyclospora outbreak, per NielsenIQ data. Against this backdrop, LOCL’s seed-to-package controlled environment and closed-loop water management reduce exposure to several variables associated with open-field agriculture, including runoff, wildlife, and changing outdoor conditions. With approximately 13,000 retail doors already serviced, this strengthens LOCL’s positioning with retailers seeking more traceable, controlled, and resilient fresh-produce supply and could support deeper commercial relationships over time. Commercial momentum continued to build as previously announced wins converted into active placements and new accounts broadened distribution entering 2H26. The six-SKU Harris Teeter rollout across more than 250 stores and a separate large regional retailer covering approximately 160 stores are now fully launched and tracking in line with expectations. The account base expanded further after quarter-end, with a new Mid-South retailer launching five SKUs across approximately 66 stores in July and a Rocky Mountain partner beginning shipments of four SKUs across approximately 110 stores in early August. LOCL also received bid awards during 1H26 extending supply arrangements with multiple national retail accounts across baby leaf lettuce and organic butter lettuce through 1Q27. The progression from account wins to multi-SKU launches and longer supply commitments provides greater demand visibility and should support more efficient crop planning and facility utilization as retail programs scale. The single-serve salad-kit relaunch adds a potentially meaningful value-added growth vector, while Romano Caesar and arugula continue to broaden LOCL’s opportunity within existing retail relationships. Following discussions with a major retailer, LOCL agreed to relaunch its single-serve salad-kit line through a Mid-Atlantic pilot covering approximately 400 stores this fall. The initiative builds on encouraging performance from the family-sized Romano Caesar Salad Kit, which recorded a 75% increase in baseline velocity in 4Q25; an additional distribution center launched in May 2026 and has since reached velocities comparable with the existing network. Arugula also remains an active growth opportunity following successful 2025 launches from Washington and Texas, particularly where conventional supply has struggled to consistently meet retailer demand. Together with baby leaf and organic butter lettuce program extensions through 1Q27, these initiatives give LOCL additional ways to deepen shelf presence and expand revenue per retail relationship without requiring a proportionate increase in physical capacity. Yield remains the primary operating growth lever, with Georgia, Texas, and Washington sustaining the approximately 10% higher run-rate capacity benefit from tower upgrades completed in 4Q25. The three Stack & Flow-enabled facilities continue to operate at the highest yield levels in company history, with tower upgrades completed in 4Q25 supporting approximately 10% higher run-rate yield capacity. Revenue increased 14% y/y in 2Q26, driven by increased production and sales from Georgia, Texas, and Washington, providing evidence that higher facility productivity is translating into incremental volume. These gains allow LOCL to increase production from the existing facility base and support continued revenue growth without adding comparable new capacity. California is beginning to provide a second proof point for the yield-led strategy, while network-wide cost initiatives broaden the path to improved unit economics. Selective investments at the California facilities remain targeted to generate as much as a 20% improvement in yields, with initial work at one location already driving an approximately 10% increase in total production versus the prior-year period. At the same time, more efficient seeding practices reduced seed costs approximately 20% y/y, while additional savings are being pursued across procurement, maintenance, labor efficiency, and freight management. These initiatives complement the ~10% yield-capacity improvement across Georgia, Texas, and Washington and reinforce the broader strategy of extracting more output at lower unit costs from the existing network. The benefits were partly obscured in 2Q26 by temporary Georgia packing inefficiencies, making gross-margin recovery an important 2H26 indicator of whether these operating gains are translating into reported profitability. Strategic partnership discussions are gaining relevance as retailer interest in controlled supply increases, while LOCL continues to keep future capacity tied to committed demand. Food-safety concerns are increasing the urgency of strategic retailer discussions, while LOCL reaffirmed its existing demand-backed approach to future capacity. Additional Stack & Flow-enabled capacity, including potential Midwest expansion, remains under review, with timing and configuration being evaluated alongside retailer discussions and product-specific requirements. This approach allows LOCL to prioritize growth from higher yields and deeper retail penetration before committing capital to additional capacity. A demand-backed expansion model could help LOCL scale distribution while limiting the capital intensity associated with its earlier build-out phase. This becomes increasingly relevant as retailers place greater emphasis on traceability, food safety, and regional supply reliability. Adjusted gross margin temporarily moderated to 27% as Georgia’s channel diversification introduced packing inefficiencies, while underlying yield and cost trends remained constructive. Adjusted gross profit was $3.7 million, essentially unchanged from 2Q25, while adjusted gross margin declined approximately 300 bps y/y from 30% and approximately 200 bps sequentially from 29%. The moderation reflected packing inefficiencies created as LOCL diversified Georgia’s channel mix; those processes have since been refined and implemented. In our view, the decline did not reflect deterioration in facility yields, which remained at record levels, but it highlights the near-term complexity that can accompany broader retail mix and package formats. A return toward the 29%-30% adjusted gross-margin range alongside continued revenue growth would provide a stronger indication that LOCL’s retail mix and cost initiatives are converting into better unit economics. Operating leverage continued to improve as LOCL shifted spending toward commercial expansion while reducing development and corporate overhead. Sales and marketing expense increased approximately 20% y/y to $2.9 million in 2Q26 and 14% to $5.1 million in 1H26, broadly in line with revenue growth of approximately 15%, suggesting the recent rollout cadence has not required disproportionate commercial spending. Retailer wins, SKU breadth, program duration, and product velocity remain the more relevant commercial indicators, with recent launches across 250+ Harris Teeter stores, a 160-store regional account, new Mid-South and Rocky Mountain programs across 66 and 110 stores, respectively, and the planned 400-store salad-kit pilot indicating that higher selling investment is translating into distribution growth. At the same time, operating expenses declined approximately 11% y/y to $15.0 million, with R&D down 29% to $4.6 million and adjusted G&A down 17% to $4.1 million. The shift is consistent with LOCL moving from heavier technology and facility-ramp spending toward scaled commercial execution, while keeping overhead growth below revenue growth. Adjusted EBITDA loss improved 17% y/y, advancing LOCL toward management’s goal of positive adjusted EBITDA. Net loss narrowed to $19.8 million from $21.6 million in 2Q25, supported by lower operating expenses and a modest reduction in net interest expense. Sequentially, the increase in GAAP net loss from 1Q26 was largely attributable to a roughly $6.6 million swing in warrant fair value accounting. More importantly, adjusted EBITDA loss improved to $5.8 million from $7.1 million y/y, while the 1H26 loss narrowed approximately 24% to $11.5 million from $15.3 million. The continued improvement, alongside higher revenue and tighter cost discipline, supports management’s view that the business is steadily narrowing the gap to positive adjusted EBITDA. Cash consumption improved as the business moved beyond the heavier facility build-out phase, although liquidity remained modest at quarter-end ahead of the subsequent financing. Net cash used in operating activities improved approximately 26% to $13.4 million in 1H26 from $18.3 million in 1H25, while investing cash use declined approximately 80% to $2.2 million from $10.9 million as construction spending normalized. Cash, cash equivalents, and restricted cash declined to $10.1 million at June 30 from $18.8 million at the end of 1Q26, with working capital narrowing to approximately $1.5 million. Inventory remained relatively stable at $7.6 million versus $7.4 million at year-end despite new retail programs ramping, indicating that the liquidity draw was driven primarily by continued operating cash consumption rather than inventory build. The lower capital-spending burden is constructive, but further revenue growth, margin recovery, and EBITDA improvement remain necessary to support stronger internal cash generation and reduce reliance on external capital. Leverage remains elevated, keeping balance-sheet discipline central to the broader profitability and cash-generation story. LOCL had approximately $302.8 million of principal outstanding under the Cargill Senior Facility and $328.3 million of total long-term debt principal at June 30. Reported long-term debt was approximately $489.3 million, primarily reflecting the debt premium recorded in connection with the 2025 restructuring. While the restructuring reduced prior obligations and the business is now operating with a lower capital-spending burden, the absolute debt load remains significant relative to LOCL’s current revenue base and cash generation, making sustained EBITDA improvement and lower cash consumption critical to improving financial flexibility. The subsequent $12.5 million strategic investment and related Cargill amendments materially improve near-term liquidity and financial flexibility. U.S. Bounti’s additional investment brings total strategic capital committed in 2026 to $27.5 million and was structured through a 7.0% convertible note maturing in August 2031, initially convertible at $1.37 per share, together with a 1.0 million-share warrant at $0.125. PIK interest reduces near-term cash requirements, while conversion of the initial principal alone could add approximately 9.1 million shares. In connection with the financing, Cargill waived a minimum-liquidity covenant default, reset required liquidity to $3.5 million through March 2027 and $2.0 million thereafter, and permitted certain 2027 interest to be paid in kind, subject to conditions. These measures extend LOCL’s liquidity runway, but continued improvement in adjusted EBITDA and operating cash flow remains necessary to address the company’s leverage and reduce reliance on external capital. 2H26 setup remains constructive, with new retail programs, sustained yield gains, and continued cost actions providing multiple levers for sequential improvement. Management expects revenue and the adjusted EBITDA loss rate to continue improving through 2026, with revenue growth and cost discipline remaining the primary drivers toward breakeven. Entering 3Q, LOCL is carrying forward $13.9 million of quarterly revenue, new launches across approximately 66 Mid-South and 110 Rocky Mountain stores, sustained ~10% higher run-rate yield capacity across Georgia, Texas, and Washington, and early production benefits from the California optimization program. The ~400-store single-serve salad-kit pilot expected this fall adds another potential growth driver. The key 2H26 proof points are continued sequential revenue growth, recovery in adjusted gross margin from 27%, and further narrowing of the $5.8 million adjusted EBITDA loss as LOCL progresses toward positive adjusted EBITDA. Disclaimer: Exec Edge does not publish proprietary estimates, ratings, price targets, or investment recommendations. The valuation discussion below is illustrative only and is based on company filings, management commentary, and third-party data and estimates. It does not constitute a recommendation, price target, rating, or prediction of future pricing. LOCL trades near the lower end of its historical valuation range despite recent operating improvement. LOCL currently trades at 0.51x LTM sales versus a three-year high multiple of 1.92x and a three-year mean of 0.83x. Applying the historical high multiple to LTM sales of $51.8 million implies an illustrative market capitalization of $99.5 million, or $4.25 per share. Importantly, this framework does not require aggressive forward revenue assumptions; rather, it reflects potential multiple recovery if investors gain confidence that LOCL’s recent execution improvements, including higher revenue, record facility yields, lower adjusted G&A, normalization of temporary gross-margin pressure, and narrowing adjusted EBITDA losses, are sustainable. Relative valuation remains nuanced across the CEA-linked peer set, while traditional fresh-produce peers provide a useful valuation anchor. LOCL trades at 0.51x LTM sales, below Village Farms at 1.22x and GrowGeneration at 0.66x, while remaining above Hydrofarm at 0.07x and below the headline CEA-linked peer average of 1.21x, which is elevated by CEA Industries at 3.57x. Against traditional fresh-produce companies, which average 0.53x LTM sales, LOCL now trades at a modest discount despite its patented Stack & Flow platform, approximately 13,000-door retail footprint, recent double-digit revenue growth, and improving adjusted EBITDA trajectory. In our view, sustained execution could support a valuation premium to conventional produce peers if investors increasingly recognize LOCL as a technology-enabled CEA platform rather than a traditional produce supplier. The key re-rating triggers remain execution-led rather than purely multiple-led. Continued sequential revenue growth, recovery in adjusted gross margin toward prior levels, further narrowing of the adjusted EBITDA loss, and conversion of recent retail wins into repeatable volume would provide the clearest support for valuation recovery. Strategic investor backing also strengthens the setup, with U.S. Bounti committing an additional $12.5 million following its $15.0 million March investment, bringing total strategic capital committed in 2026 to $27.5 million and strengthening near-term financial flexibility. At the same time, leverage and prospective dilution remain important constraints, meaning a sustained re-rating will ultimately depend on LOCL converting higher facility productivity and broader distribution into stronger margins, lower cash consumption, and improved per-share economics. Read Exec Edge’s Initiation on Local Bounti Corporation Here Subscribe to our Weekly Newsletter to Receive All Research Contact: Executives-Edge.com [email protected] The post Local Bounti’s Network Yields at Record Levels, Retail Momentum Broadened – Quarterly Update Report appeared first on ExecEdge.

GrowGeneration Corp. GRWG reported a second-quarter 2026 loss of 3 cents per share, narrower than the Zacks Consensus Estimate of a loss of 4 cents. The loss also narrowed from 8 cents a year ago. GrowGeneration generated sales of $43.2 million in second-quarter 2026, which increased 5.5% year over year, led by strength in its commercial B2B business. The top line surpassed the Zacks Consensus Estimate of $43 million. Cultivation and Gardening sales increased to $34.9 million from $32.9 million in the prior-year quarter. Proprietary-brand sales rose to $13.8 million from $10.5 million, while non-proprietary brand sales declined to $21.1 million from $22.4 million.Storage Solutions sales increased to $8.3 million from $8.1 million. Within Cultivation and Gardening, durable-product sales climbed to $9.8 million from $6.7 million, while consumables declined to $25.1 million from $26.2 million. GrowGeneration Corp. price-consensus-eps-surprise-chart | GrowGeneration Corp. Quote The cost of sales increased 5.2% year over year to $30.9 million in the quarter. Gross profit moved up 6.3% year over year to $12.3 million. The gross margin was 28.5% in the quarter under review compared with 28.3% in the prior-year quarter. The upside was driven by a higher mix of proprietary-brand products within the company’s Cultivation and Gardening segment.Selling, general and administrative expenses increased 5% to $6.5 million in the quarter under review. However, total operating expenses fell 13.1% year over year to $14.7 million in the second quarter of 2026, aided by lower store operations and other operational expenses.Adjusted EBITDA was $0.3 million in the quarter against the prior-year quarter’s negative $1.3 million. At the end of the second quarter of 2026, GrowGeneration had cash and cash equivalents of $23.5 million, down from $30.4 million at the end of 2025. Inventory was $35.3 million, while prepaid and other current assets were $7.8 million at the quarter end. Total current liabilities, including accounts payable, accrued liabilities and payroll and payroll tax liabilities, were $25.6 million at the quarter’s end.GRWG also continued its capital-return program during the quarter. The company repurchased 0.7 million shares at an average price of $1.38 per share, leaving approximately $9 million available under its share-repurchase authorization. GRWG reaffirmed its 2026 sales guidance of $162-$168 million. The company expects proprietary-brand sales to reach 40% of Cultivation and Gardening revenues by the year-end and projects full-year gross margin between 27% and 29%.The company raised its full-year adjusted EBITDA outlook to $2-$3 million compared with its previously expected breakeven adjusted EBITDA. The upside is supported by the second-quarter performance, operating improvements and anticipated tariff-related benefits. For the third quarter of 2026, GRWG expects consolidated net sales of $44-$46 million, implying continued sequential growth. In the past year, GrowGeneration shares have gained 18% compared with the industry’s 21.4% growth. Image Source: Zacks Investment Research Bunge Global SA BG reported second-quarter 2026 adjusted earnings of $2 per share, up 52.7% year over year. The figure missed the Zacks Consensus Estimate of $2.03 by 1.5%. Bunge’s sales surged 88.3% to $24.04 billion and beat the consensus mark of $23.49 billion by 2.3%. Sales and volumes increased across all segments. GRWG currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Some other top-ranked stocks from the Industrial Products sector are Helios Technologies, Inc HLIO and Fastenal Company FAST. HLIO and FAST carry a Zacks Rank #2 at present.The Zacks Consensus Estimate for Helios Technologies’ 2026 earnings is pegged at $3.09 per share. The company has a trailing four-quarter average earnings surprise of 13.1%. Helios Technologies’ shares have gained 53.5% in a year.The Zacks Consensus Estimate for Fastenal’s 2026 earnings is pinned at $1.26 per share, which indicates year-over-year growth of 15%. The company’s shares have grown 7.7% in a year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GrowGeneration Corp. (GRWG) : Free Stock Analysis Report Fastenal Company (FAST) : Free Stock Analysis Report Bunge Global SA (BG) : Free Stock Analysis Report Helios Technologies, Inc (HLIO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Tuesday, Aug. 11, 2026 at 4:30 p.m. ET Co-Founder and Chief Executive Officer - Darren Lampert Chief Financial Officer - Gregory Sanders Operator: Hello, everyone, and welcome to GrowGeneration. Second Quarter 26 Earnings Conference Call. My name is Melissa, and I will be your operator for today's call. At this time, participants are in a listen only mode. Following prepared remarks, we will open the call to questions from analysts with instructions will be given at that time. This conference call is being recorded and a replay of today's call will be available on the Investor Relations section of GrowGeneration's website. I will now hand the call over to Phil Carlson, with KCSA Strategic Communications for introduction and the reading of the safe harbor statement. Please go ahead, sir. Phil Carlson: Thank you, operator, and welcome, everyone, to GrowGeneration's Second Quarter 26 Earnings Results Conference Call. With us today from GrowGeneration are Darren Lampert, Co-Founder and Chief Executive Officer and Gregory Sanders, Chief Financial Officer. Company's second quarter 26 earnings press release was issued after close of market today. A copy of this press release is available on the Investor Relations section of the GrowGeneration website at ir.growgeneration.com. I would like to remind everyone that certain comments made on this call include forward looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 2000. These forward looking statements are based on management's current expectations and beliefs concerning future events, and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward looking statements. Please refer to today's press release and other filings with the SEC for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any of the forward looking statements made today. During the call, we will use some non-GAAP financial measures as we describe business performance. The SEC filing as well as the earnings press release, which provide reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are all available on our website. Following the prepared remarks, management will be happy to take your questions. We ask that you please limit yourself to 1 question and 1 follow-up. If you have additional questions, please reenter the queue, and we will take them as time allows. Now I will hand the call over to GrowGeneration's Co-Founder and CEO, Darren Lampert. Darren? Please go ahead. Darren Lampert: Thanks, Phil. And good afternoon, everyone. Thank you for joining us to review GrowGeneration's second quarter 26 financial results. And to discuss our outlook for the rest of 2026. I am pleased to report that our sales momentum in early 26 continued into the second quarter. This marks our third consecutive quarter of year over year revenue growth. Following the actions we have taken over the past few years, as part of our larger strategy to transform GrowGeneration into a commercial proprietary brand-driven business. This growth strategy is centered around 3 key priorities. Expanding our commercial platform growing our proprietary brands and maintaining a disciplined cost structure. Our expanded commercial B2B business is a core growth driver of our strategy. Through our digital, B2B platform, GrowGen Pro, we have strengthened our relationships with both single and multi state operators greenhouse growers, and many other commercial cultivation customers throughout North America. These customers recognize the value we provide with many of them adopting our products and growing protocols into their operations. Another key component of our strategy is growing our proprietary brands across additional channels. Aside from building stronger brand loyalty. Proprietary brand sales also represent higher margins reoccurring consumable purchases and create greater competitive differentiation. For GrowGen in the marketplace. Our efforts have been very successful. As we continue to see increased adoption of proprietary brands such as CharCoir, Drift Hydro, The Harvest Company, dialed in and Power SI. With this strategy, we set certain goals for ourselves. In 26. Including proprietary brand penetration reaching 40% of cultivation and gardening revenue. By year end. Based on our performance to date, we have updated our full year adjusted EBITDA goal and now expect to generate adjusted EBITDA in the range of $2 million to $3 million This is significant for GrowGeneration. As it shows the progress we have already made as well as the ongoing evolution of our business as we set the bar higher to keep driving revenue growth reduce costs, and improve margins. Now let's look at our second quarter results. We generated total revenue of $43.2 million which was in line with our expectations. And represents both sequential and year over year growth. Even as we operated with a smaller retail store footprint. We reported proprietary brand sales representing approximately 40% of cultivation and gardening revenue. Compared to 32% in the same period last year. So, we are already at our year end target mix just halfway through the year. In addition to reaching this target, these results represent our progress in building a more focused commercially driven and profitable business. We have continued to transition our sales towards higher value recurring consumable proprietary branded products. Expanding proprietary brands is central to our margin expansion and long term value creation strategy and we are very pleased with our progress. Our MMI Storage Solutions segment also delivered solid results this quarter. With $8.3 million in revenue, MMI continues to benefit from higher capital investment activity and its diversification into industrial, agricultural, and specialty end markets. We expect this segment will continue to generate steady growth throughout the remainder of 2026. All this has contributed to expanded margins. For the second quarter, we achieved gross profit margins of 28.5%, a sequential improvement of 310 basis points from 25.4% last quarter and compared to 28.3% last year. Turning to expenses for the quarter. We reduced store and other operating expenses by approximately 22% year over year and total expenses by 13%. These results display the considerable benefits we have achieved from the increased efficiency and cost reduction initiatives that we have been implementing over the past several years. All of this contributed to GrowGen, achieving positive adjusted EBITDA for the second quarter. As I mentioned earlier, this is an important milestone for us. Aside from increased profitability, it demonstrates the value we have created through our strategic initiatives as we continue to transform ourselves into a stronger business with increased growth prospects. I am not just talking about the operational improvements we have made. I am also talking about our emphasis on revenue quality. We are growing higher margin sales as part of our revenue mix, particularly through our proprietary brands. Also attaining positive adjusted EBITDA this quarter has now led us to reach even higher as we have raised our full year 2026 adjusted EBITDA goal to the range of $2 million to $3 million As part of this strategy, we have also continued to maintain a strong balance sheet. Today, we possess the strongest balance sheets within our industry. This financial flexibility gives us a considerable competitive advantage as we seek further infrastructure projects and take steps to increase our proprietary brand expansion. At quarter end, we had $41 million of cash while having no debt. We have the resources to keep investing in our growth initiatives. While still maintaining disciplined capital allocation. This financial strength also supports our stock repurchase activity. During the second quarter, we repurchased 700 thousand shares of common stock at an average price of $1.38 per share. Regarding our forward outlook, for the third quarter of 26, we anticipate revenue of between $44 million to $46 million At the same time, we expect to generate positive adjusted EBITDA for the quarter. This gives us the confidence to upgrade our full year 2026 guidance. Which includes net revenue in the range of $162 million to $168 million and adjusted EBITDA in the range of $2 million to $3 million for the full year. Before I turn the call over to Gregory, I want to give some perspective on the latest developments around Schedule 3 rescheduling for adult use cannabis. Since our last earnings call, the ALJ concluded its formal hearings While a ruling is still pending, we are confident that regardless of timing, GrowGen is well positioned to support increased investment activity from our customers. We believe there is no other organization better suited for this. With our growing portfolio, of proprietary brands, infrastructure builds, and system integrations longstanding customer partnerships, and our talented and seasoned management team. All of this is supported by our industry leading balance sheet and proven track record of execution. That concludes my remarks. Now I will turn the call over to our CFO, Gregory Sanders. Gregory Sanders: Thank you, Darren, and good afternoon, everyone. I will begin with a review of our second quarter 26 results and then I will provide additional context on our outlook for the year. Our second quarter results represent another forward in the transformation of GrowGeneration. We delivered our third consecutive quarter of year over year growth continued expansion of proprietary brand penetration, delivered positive adjusted EBITDA and maintained the disciplined cost structure that we have built over the past several years. These results reflect continued execution against the strategic priorities that we have outlined to investors. For the second quarter of 26, GrowGeneration reported net sales of $43.2 million an improvement of 12.6% sequentially and an increase of 5.5% compared to $41 million during the same period last year. Revenue growth continues to be driven primarily by our commercial B2B business and increasing adoption of our proprietary brands. Both of which remain strategic priorities for the company. Net sales in our cultivation and gardening segment were $34.9 million for the quarter compared to $32.9 million in the same period last year. Proprietary brand sales represented 39.7% of cultivation and gardening revenue, up from 32% in the prior year. This was mainly driven by our strategic initiative to increase our sales mix of higher margin proprietary products, Higher proprietary brand penetration continues to improve the quality of our revenue by increasing gross profit dollars and reinforcing our long term margin expansion strategy. In our storage solutions segment, net sales were $8.3 million for the quarter, up from $8.1 million in the second quarter of 2025. Storage Solutions continues to provide an increasingly diversified revenue stream outside of traditional cultivation markets. We continue to see healthy customer demand across retail, industrial, and commercial infrastructure projects, reflecting ongoing in warehouse modernization and automation. This diversification helps reduce earnings volatility while providing additional opportunities for profitable growth. Gross profit was $12.3 million for the second quarter of 26, compared to $11.6 million during the same period last year. In cultivation and gardening, gross profit increased year over year primarily due to increased sales volume and a higher mix of proprietary brand products. Storage Solutions gross profit dollars declined modestly due to project mix, and rising transportation costs during the quarter, despite higher sales volume. Total company gross margin was 28.5%, compared to 28.3% last year. The improvement reflects the continued expansion of proprietary brand sales within our cultivation and gardening segment. Partially offset by higher transportation costs. Now turning to expenses. In the second quarter of 26, store and other operating expenses declined by approximately 21.9% to $6.1 million compared to $7.9 million in the second quarter of 25 reflecting the benefits of our cost reduction initiatives. Selling, general and administrative expenses were $6.5 million or a 5% increase compared to $6.2 million last year, primarily due to increases in our commercial sales structure that support our growth initiatives. Total operating expenses decreased by $2.2 million or 13.1% to $14.7 million, compared to $16.9 million in the comparable 2025 period. Depreciation and amortization totaled $1.5 million down $1.2 million or 44% compared to $2.7 million in the same period last year. The decrease primarily reflects asset retirements related to cost reduction initiatives and certain intangible assets reaching the end of their useful lives. GAAP net loss decreased to $2 million, or negative $0.03 per share a $2.8 million improvement compared to a net loss of $4.8 million, or negative $0.08 per share in the prior year period. The improvement was primarily driven by reduced operating expenses, revenue growth and lower depreciation and amortization. In the second quarter, as expected, we returned to positive adjusted EBITDA. Non-GAAP adjusted EBITDA as defined in our press release, was a positive $0.3 million, a $1.6 million year over year improvement compared to a loss of $1.3 million in the prior year. Returning to positive adjusted EBITDA, marks an important milestone in the transformation of GrowGeneration. Over the past several years, we have sustainably reduced our cost structure. Improved operating leverage, and positioned the business to return to sustainable profitability as revenue continues to recover. Now turning to the balance sheet. We ended the quarter with $41 million of cash, cash equivalents and marketable securities and no debt. Our debt free balance sheet continues to differentiate GrowGeneration within the industry and provides us with significant flexibility to invest in organic growth evaluate strategic opportunities, and opportunistically return capital to shareholders. Earlier this year, our Board of Directors authorized a share repurchase program of up to $10 million of the company's outstanding common stock. Reflecting the Board's confidence in the long term intrinsic value of the business and our commitment to disciplined capital allocation. During the second quarter, the company repurchased 700 thousand shares of common stock at an average price of $1.38 per share exclusive of incremental direct costs, As of 6/30/2026, approximately $9 million remained available under the stock repurchase program. We intend to execute the program opportunistically during the remainder of 2026 subject to market conditions, capital allocation priorities and applicable securities law. Now turning to our outlook. We are raising our full year 2026 adjusted EBITDA guidance while reaffirming our revenue outlook. We continue to expect net revenue in the range of $162 million to $168 million and now expect adjusted EBITDA in the range of $2 million to $3 million for the full year compared to our previous expectation of approximately breakeven. The increase reflects our strong execution year to date continued focus on revenue quality, proprietary brand penetration, disciplined cost management, and the expected recognition of previously incurred IEPA tariff refunds during the third quarter For the third quarter, we expect net revenue in the range of $44 million to $46 million while continuing to generate positive adjusted EBITDA. As we look ahead, we believe GrowGeneration is, operating from a position of strength. We have returned the business to revenue growth. Materially improved profitability maintains a strong debt free balance sheet, and continued to execute a disciplined long term strategy. While there is still work ahead, we believe the progress we have made over the past several years has established a much stronger foundation for long term shareholder value creation. With that, I will turn the call back to Darren for closing remarks. Darren Lampert: Thanks, Gregory. And thank you again to everyone for joining us today. Overall, we delivered a strong second quarter. Generating revenue growth across most areas of our business expanding proprietary brand penetration reducing costs, and improving profitability. while reaching positive adjusted EBITDA for the quarter. Our performance continues to reflect the benefits of our expanding commercial platform and our improved operations and reduced cost structure. This also enables us to once again end the quarter with a strong balance sheet and no debt. Moving forward, we will remain focused on executing our strategy and continuing our transformation into a commercial proprietary brand-driven business. We will stay focused on driving continued revenue growth while refining our revenue mix improving margins and expanding our profitability. As we continue to advance towards our year end goal our proprietary brands representing 40% of cultivation and gardening sales and our updated goal of generating full year adjusted EBITDA in the range of $2 million to $3 million As you can see from this quarter's performance, our strategy is continuing to drive improved financial and operating results. And we look forward to keeping you updated as we make further progress during the balance of the year. That concludes our prepared remarks. Operator, please open the line for questions. Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the 1 on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, Please press the star followed by the 2. If you are using a speaker phone, please lift the handset before pressing any key. We ask that you limit yourself to 1 question and 1 follow-up question. Your first question comes from Aaron Grey with Alliance Global Partners. Please go ahead. Erin: Hi. Good evening, and thank you very much for the questions. First question for me, just regarding the updated guide, particularly on EBITDA, right? So you guys held sales and gross margin guide, increased EBITDA. It implies $3.3 to about $4.3 million in the back half. So just given the seasonal softness we usually see in 4Q, how much of it is attributable to just a really strong core Mark, maybe less seasonality versus that tariff benefit that you mentioned as well. Thank you. Gregory Sanders: Hi, Aaron Grey. Thank you for the question. I think first things first, the first 2 quarters gave us a higher level of confidence in the underlying performance of the business. Returning the company to positive adjusted EBITDA in the second quarter along with returning gross margin to 28.5%. And the cost reduction initiatives that we have executed gives us more confidence in the operating model as we move forward. In addition to our comfort around the business and our execution so far year to date, we are expecting an IEPA tariff amount to be recognized in the third quarter that exceeds $2 million. So that is a primary driver as well for us as we look at the third quarter. We expect generally for the fourth quarter to return to normal levels of performance relative to seasonality and commentary that we have made historically. Erin: Okay, great. Appreciate that color. Second question for me. Just regarding proprietary brands, you guys already hit your mark for the full year within the quarter. essentially being at 40%. So just given growth accelerated, the quarter, maybe talk about some of the dynamics that drove that growth, maybe deeper penetration within your commercial business and with some of the MSOs that I know you have been targeting? Thank you. Darren Lampert: Yeah. I think we have been pretty transparent that our commercial business, our MSO business is certainly expanding. We still do believe that we are in the early stages of growth in a bunch of our proprietary brands that are out on the market right now. And we still believe that there is tremendous opportunities on the distribution side of it I would say right now, about 90% of the sales are going through are proprietary brands right now. Are GrowGen centric to our in through our commercial division. So we have high hopes that, you know, as the years go on, that, you know, many other groups adopt our brands within the industry. So we believe that is just starting, and we are getting way more involved in distribution. Of our brands on a go forward basis and brands are working. You know, we have hired a bunch of technical advisers that are in the facilities on a daily basis. And the brands are really turning out some of the best cannabis in the country right now. Both on the cost side and the quality side. So we could not be any prouder of the team that we have out in the markets right now And really, the work that we are doing to transform the industry, really, the growing better cannabis, at just better levels and better price points. Great to hear. Thanks for the color. I will go ahead and jump back in the queue. Thank you. Operator: Your next question comes from Brian with Oppenheimer. Please go ahead. Brian Nagel: it is Brian Nagel. Nice quarter. Congratulations. Thank you, Brian Nagel. Darren Lampert: So it is going to be a follow-up to a prior I think it is going to be a follow-up to the prior question. Brian Nagel: Here, you have had, I guess, now 3 consecutive quarters of positive year on year revenue growth. If you look at the guidance for Q3, again, got the numbers right, you are guiding revenue growth year on year to be down. So is there a-- are you-- is there a breaking trend? Is there a reason for that conservatism? Gregory Sanders: Hey, Brian Nagel. Thanks for the question. When you look at Q3 of 25, what we executed was a significant volume of durable sales in that period. That created some level of lumpiness in the period last year. In fact, Q3 was a fairly significant outlier for us on a quarterly basis when you look at 2025 in its entirety. I think what you are seeing now in 2026 is maybe less lumpiness where our durables business has generated more consistent results from quarter to quarter. And I think when you look at the guidance that we have in totality for 2026 compared to 2025, we are generally guiding for an up year in contrast to last year. I think you are just seeing the revenue more even across the periods and less of that onetime exposure that you saw in Q3 of last year. So, generally, we are content with our expectations for Q3 in 2026. In fact, we still expect Q3 to be our strongest performing quarter from a revenue perspective. So although it is down year over year, we still feel very good about where we are at in the year and our forward looking outlook. Darren Lampert: Brian Nagel, in addition to that, I think on the margin side of it, you will see higher margins in the third quarter of this year than you certainly saw last year. With higher consumable products than durable products. But like anything else, things can change. We may close some additional sales within the third quarter that may bring guidance higher. But right now, it is really just too early to tell. And we still do believe that you will see a much stronger fourth quarter this year than you saw last year. Brian Nagel: No. that is that is very helpful context. I appreciate all that. Then I give the second question I have, and I guess this is bigger picture. But is-- as we are watching the proprietary brands grow, As you said, it hit from a penetration standpoint, hits your-- your annual target here halfway through the year, so you are well ahead I guess the first 1 I am going to ask as we think that this business is starting to really take hold, By channel, is there are you seeing particular growth in 1 channel I think in the prior question, you mentioned the MSOs. But are you again, is the business growing? Are you seeing outsized strength in 1 channel And how should we think about the from a channel perspective, where you are selling to proprietary brands over time? Darren Lampert: I think the channels are pretty broad right now. And, again, mostly on the consumable side of it, And we do believe that with a bunch of our consumable products right now, both under the CharCoir and Drip brand names and also Arvco. That there is considerable growth ahead that we believe that, you know, we are just at the start of private label penetration. In the hydroponic cannabis space. But we do believe that the growth from this industry is just starting in lawn and garden and the ag space. And we think you will see many years of growth to come. 1 of the hardest issues is you are starting from a such a small base So when you are seeing double digit growth, you know, off a couple million dollars, it is just not making it is not making, you know, a big enough impact in our numbers. But as time goes on, we certainly believe that. 1 of the other sides of it, Brian Nagel, when we take a look at, you know, GrowGen today, and the big picture of GrowGen, when you go back to 2024, we lost over $16 million on an adjusted basis. We lost over $6 million last year. And this year, we are looking positive $2 million to $3 million on an adjusted basis. We have picked up almost $18 million. with about over 25 fewer locations. So, you know, at this rate, if we continue this rate for a couple more years, you are going to see quite an impact on the growth side of it. And also on the EBITDA side of it, which really excites us. We have done an incredible job, I believe, you know, in reformulating GrowGen and reorganizing it to really, to a-- to a-- to a business to business company that is driven by product and technical support. And it is what the industry needs right now. And we still believe that, you know, again, better years are here to come. that is very helpful. I appreciate the color, Darren. Thank you. Thank you, Brian Nagel. Operator: Your next call comes from Mark with Lake Street. Please go ahead. Mark: Hi, guys. Wanted to ask first about SG&A. It was more flattish, kind of year over year. I am kind of curious if you got SG&A down to kind of where you want it, and this is a kind of good run rate, Or is there more cuts that you think you can make there? Gregory Sanders: Yeah. Hey, Mark Smith. Thanks for the question. In terms of SG&A in the third quarter, I think what you have seen from our business is we closed 4 stores in the first quarter. And we have rebalanced some of our costs into more growth initiatives. So we have expanded our sales force on the commercial side. We have put more dollars into marketing. We have added more dollars into trialing our private label products. Across the cannabis space and getting our products into more hands of our core customer. So really, more than anything else, it is a rebalancing when we look at 3Q or excuse me, second quarter. In comparison to prior quarters. Now, in terms of the go forward we are continuing to look at cost reduction opportunities, primarily on the store side. And we see SG&A as the kind of core driver of a lot of our growth initiatives on both the commercial side as well as with our proprietary brands. So we generally expect SG&A to remain in the low sixes in the back half of the year. So relatively consistent, maybe incrementally down compared to what you saw in the second quarter. But it is generally a stable area for us at this point as we continue to focus on returning to growth in the business. Mark: Perfect. And then I wanted to ask about capital allocation. Your balance sheet continues to be a really good spot here. You started buying back some stock. I am curious kind of as we think about M&A, reinvestment in the business, returning cash to shareholders, kind of how you look at allocating, some of this cash. Darren Lampert: You know, Mark Smith, I think we have been pretty transparent If the right transaction, you know, came, we were certainly buyers within the industry. Even outside the industry when it goes into the ag and lawn and garden space. We just have not found the right transaction for GrowGen right now. And, you know, as I have also said in the past, you know, we have spent the last 3 years restructuring GrowGen. And spending an enormous amount of time getting our ducks in order. So, you know, we are, you know, we are out looking right now. But, you know, without the right transaction, we are not looking to buy revenue. That, you know, that we cannot integrate into this company and earnings coming with it. So, you know, right now, we are quite comfortable with the cash in the bank. We are getting a little more aggressive on the loaning side of it. On some of the deals that we are working on CapEx. that is a wonderful part of our business right now. And we believe a growing part of our business We have been quite conservative with lending money on the CapEx side of it. But, again, you know, we certainly are out there. Looking for the right transactions on that side of it. And we will continue to buy back stock. You know, we have a $10 million stock buyback in you know, at the end of the second quarter. We have used $1 million of that so far. Perfect. Thank you. Operator: Ladies and gentlemen, that is all the time we have for questions. I will turn the call back over to Darren Lampert. Please go ahead. Darren Lampert: As you can see from this quarter's performance, our strategy is continuing to drive improved financial and operating results. We look forward to keeping you updated as we make further progress during the balance of the year. Thank you. Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends GrowGeneration. The Motley Fool has a disclosure policy. GrowGeneration (GRWG) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Revenue: Total revenue of $43.2 million, up 5.5% year-over-year and 12.6% sequentially. Cultivation and Gardening Segment Revenue: $34.9 million, up from $32.9 million in the prior year period. Storage Solutions Segment Revenue: $8.3 million, up from $8.1 million in the second quarter of 2025. Proprietary Brand Penetration: Represented 39.7% of Cultivation and Gardening revenue, up from 32% in the prior year. Gross Profit: $12.3 million, up from $11.6 million in the same period last year. Gross Margin: 28.5%, compared to 28.3% last year. Store and Other Operating Expenses: Declined by approximately 21.9% to $6.1 million, compared to $7.9 million in the prior year. SG&A Expenses: $6.5 million, a 5% increase compared to $6.2 million last year. Total Operating Expenses: Decreased by 13.1% to $14.7 million, compared to $16.9 million in the comparable 2025 period. Depreciation and Amortization: $1.5 million, down 44% compared to $2.7 million in the same period last year. Net Loss: Decreased to $2 million, or negative $0.03 per share, compared to a net loss of $4.8 million, or negative $0.08 per share, in the prior year. Adjusted EBITDA: Positive $0.3 million, a $1.6 million year-over-year improvement compared to a loss of $1.3 million in the prior year. Cash Position: $41 million in cash, cash equivalents and marketable securities with no debt. Share Repurchases: Repurchased 700,000 shares of common stock at an average price of $1.38 per share. Third Quarter 2026 Outlook: Revenue expected between $44 million and $46 million with positive adjusted EBITDA. Full Year 2026 Guidance: Net revenue expected in the range of $162 million to $168 million; adjusted EBITDA raised to a range of $2 million to $3 million. Warning! GuruFocus has detected 3 Warning Signs with GRWG. Is GRWG fairly valued? Test your thesis with our free DCF calculator. Release Date: August 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. GrowGeneration Corp (NASDAQ:GRWG) reported its third consecutive quarter of year-over-year revenue growth, with Q2 2026 net sales of $43.2 million, up 5.5% from the prior year. Proprietary brand sales reached 39.7% of cultivation and gardening revenue, already hitting the year-end target of 40% by mid-2026, up from 32% a year ago. The company achieved positive adjusted EBITDA of $0.3 million in Q2 2026, a $1.6 million improvement year-over-year, and raised its full-year 2026 adjusted EBITDA guidance to $2 million-$3 million. Gross margin expanded to 28.5% in Q2 2026, a sequential improvement of 310 basis points, driven by a higher mix of proprietary brand products. GrowGeneration Corp (NASDAQ:GRWG) maintains a strong balance sheet with $41 million in cash and no debt, supporting opportunistic share repurchases (700,000 shares in Q2) and strategic investments. The Storage Solutions segment (MMI) delivered steady revenue of $8.3 million in Q2, benefiting from diversification into industrial and agricultural markets. Operating expenses decreased 13.1% year-over-year, reflecting successful cost reduction initiatives and improved operational efficiency. GrowGeneration Corp (NASDAQ:GRWG) still reported a GAAP net loss of $2 million in Q2 2026, though improved from a $4.8 million loss a year ago. Q3 2026 revenue guidance of $44 million-$46 million implies a year-over-year decline, partly due to a tough comparison from a large durable sales order in Q3 2025. The company's revenue growth is heavily dependent on the commercial B2B segment, which may face volatility from project-based durable sales. Storage Solutions gross profit declined modestly in Q2 due to project mix and rising transportation costs, despite higher sales volume. SG&A expenses increased 5% year-over-year, driven by investments in commercial sales structure, which could pressure profitability if revenue growth slows. The company's proprietary brand sales are still largely concentrated within its own channels (90% through GrowGen-centric sales), limiting external distribution growth potential. The full-year 2026 adjusted EBITDA guidance of $2 million-$3 million is still relatively low, indicating ongoing profitability challenges despite improvements. Q: How much of the increased full-year adjusted EBITDA guidance is attributable to a strong core third quarter versus the expected recognition of previously incurred IEEPA tariff refunds? A: Gregory Sanders (CFO) explained that the first two quarters provided higher confidence in the underlying business performance, including a return to positive adjusted EBITDA and gross margin expansion to 28.5%. Additionally, the company expects to recognize an IEEPA tariff amount exceeding $2 million in the third quarter, which is a primary driver of the increased guidance. The fourth quarter is expected to return to normal levels of performance relative to seasonality. Q: What dynamics drove the acceleration in proprietary brand penetration, which already hit the full-year target of 40% of cultivation and gardening revenue in Q2? A: Darren Lampert (CEO) stated that the commercial B2B and MSO business is expanding, but the company is still in the early stages of growth for many of its proprietary brands. Approximately 90% of proprietary brand sales are currently GrowGen-centric through its commercial division. The company has hired technical advisers working in facilities daily, and the brands are producing high-quality cannabis at better price points, driving adoption. Q: Given three consecutive quarters of year-over-year revenue growth, why does the Q3 2026 guidance imply a year-over-year revenue decline? A: Gregory Sanders (CFO) noted that Q3 2025 included a significant volume of durable sales, creating a lumpy comparison. In 2026, the durables business has generated more consistent results quarter-to-quarter. Darren Lampert (CEO) added that Q3 2026 will have higher margins due to a better mix of consumable products versus durables, and the company still expects Q3 to be its strongest revenue quarter of the year. Q: Are you seeing outsized strength in any particular sales channel for proprietary brands, and how should we think about channel growth over time? A: Darren Lampert (CEO) said the channels are broad, with most growth on the consumable side under brands like Char Coir, Drip, and Harvco. He believes the industry is just at the start of private label penetration in the hydroponic cannabis space, with future growth expected in lawn and gardening and the ag space. He highlighted the company's significant profitability improvement, from a $16 million adjusted EBITDA loss in 2024 to a projected $2 million to $3 million gain in 2026, despite operating 25 fewer locations. Q: Is SG&A down to the desired level, and is the current run rate sustainable, or are there more cost cuts to come? A: Gregory Sanders (CFO) explained that the company closed four stores in Q1 and rebalanced costs into growth initiatives like expanding the commercial sales force, marketing, and trialing private label products. SG&A is expected to remain in the low $6 million range in the back half of the year, relatively stable, as the company continues to focus on returning to growth. Q: How is the company thinking about capital allocation among M&A, reinvestment in the business, and returning cash to shareholders? A: Darren Lampert (CEO) stated the company is actively looking for the right transactions in the industry and adjacent spaces like ag and lawn and garden, but will not buy revenue that cannot be integrated with earnings. The company is becoming more aggressive on the lending side for CapEx deals, which is a growing part of the business. It will continue to opportunistically buy back stock under its $10 million repurchase program, having used $1 million so far. Q: Can you provide more color on the Q2 revenue performance and the drivers behind the sequential and year-over-year growth? A: Gregory Sanders (CFO) reported net sales of $43.2 million, up 12.6% sequentially and 5.5% year-over-year. Growth was driven primarily by the commercial B2B business and increasing adoption of proprietary brands. The Cultivation and Gardening segment generated $34.9 million, while the Storage Solutions segment contributed $8.3 million, benefiting from diversification into industrial, agricultural, and specialty end markets. Q: What is the outlook for the Storage Solutions (MMI) segment for the remainder of 2026? A: Darren Lampert (CEO) stated that MMI delivered solid results with $8.3 million in revenue in Q2, benefiting from higher capital investment activity and diversification into industrial, agricultural, and specialty end markets. The company expects this segment to continue generating steady growth throughout the remainder of 2026. Q: What is the company's perspective on the latest developments around Schedule III rescheduling for adult-use cannabis? A: Darren Lampert (CEO) noted that the ALJ has concluded its formal hearings, and a ruling is pending. Regardless of timing, GrowGen is well positioned to support increased investment activity from customers, given its portfolio of proprietary brands, infrastructure builds, system integrations, customer partnerships, and industry-leading balance sheet. Q: Can you elaborate on the gross margin performance and the factors that contributed to the sequential improvement? A: Gregory Sanders (CFO) reported total company gross margin of 28.5%, a sequential improvement of 310 basis points from 25.4% in Q1. The improvement reflects the continued expansion of proprietary brand sales within the Cultivation and Gardening segment, partially offset by higher transportation costs in the Storage Solutions segment. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved a third consecutive quarter of year-over-year revenue growth, driven by the strategic shift toward a commercial B2B platform and proprietary brand focus. Successfully reached the year-end target of 40% proprietary brand penetration six months early, up from 32% in the prior year period. Transitioned the sales mix toward higher-value recurring consumables, which management identifies as the primary engine for margin expansion and long-term value creation. Realized significant cost efficiencies, reducing store and operating expenses by 22% year-over-year through a disciplined restructuring of the retail footprint. Leveraged the MMI Storage Solutions segment to diversify revenue streams into industrial and specialty markets, mitigating volatility inherent in the traditional cultivation sector. Maintained a debt-free balance sheet with $41 million in cash, providing a competitive advantage for funding infrastructure projects and proprietary brand expansion. Attributed the return to positive adjusted EBITDA to improved revenue quality and the cumulative impact of multi-year cost reduction initiatives. Raised full-year 2026 adjusted EBITDA guidance to $2 million to $3 million, significantly up from the previous breakeven expectation. The company anticipates third-quarter revenue between $44 million and $46 million and expects to recognize IEPA tariff refunds during the third quarter, which is a primary driver for the increased full-year adjusted EBITDA guidance of $2 million to $3 million. Expect fourth-quarter performance to align with historical seasonality patterns while maintaining a stronger year-over-year profile due to improved revenue mix. Project continued growth in proprietary brand distribution as technical advisors work directly within customer facilities to drive product adoption. Assume a ruling on Schedule 3 rescheduling will eventually occur, positioning the company to support a subsequent increase in customer investment activity. Recognized a $2.8 million improvement in GAAP net loss, primarily due to lower operating expenses and reduced depreciation from asset retirements. Executed a share repurchase program, buying back 700,000 shares at an average price of $1.38, with $9 million remaining in the authorization. Acknowledged that while Q3 revenue guidance may appear down year-over-year, it reflects a shift away from 'lumpy' durable equipment sales toward consistent consumables. Noted that rising transportation costs acted as a modest headwind to gross profit dollars within the Storage Solutions segment despite higher volume. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management cited higher confidence in the underlying operating model and the expected recognition of a $2 million+ IEPA tariff refund in Q3. The shift toward a 28.5% gross margin reflects the success of a higher-quality revenue mix, while cost reduction initiatives contributed to the company achieving positive adjusted EBITDA. Growth is currently driven by the commercial B2B division and MSO partnerships, but management sees significant untapped potential in external distribution. The company is deploying technical advisors into cultivation facilities to prove product efficacy, which is expected to drive long-term loyalty for consumable brands. SG&A is expected to remain stable in the 'low sixes' (millions) as the company rebalances savings from store closures into commercial sales and marketing. Management views current SG&A levels as a necessary foundation for returning the business to sustainable growth. The company is actively looking for M&A but will not 'buy revenue' that cannot be integrated profitably into the existing structure. Management is becoming more aggressive in providing CapEx financing/lending to customers, viewing it as a growing and attractive part of the business.

Interested in GrowGeneration Corp.? Here are five stocks we like better. Revenue increased 5.5% year over year to $43.2 million, marking GrowGeneration’s third consecutive quarter of annual growth, driven by its commercial B2B business and stronger proprietary-brand adoption. Proprietary brands reached 39.7% of cultivation and gardening revenue, nearly achieving the company’s 40% year-end target six months early. Positive adjusted EBITDA of $0.3 million and lower operating costs also helped narrow the GAAP net loss to $2 million. GrowGeneration maintained its full-year revenue forecast of $162 million to $168 million but raised adjusted EBITDA guidance to $2 million-$3 million, citing margin improvements, cost reductions and expected tariff refunds. Are These 3 Cannabis Stocks a Buy? GrowGeneration (NASDAQ:GRWG) reported second-quarter 2026 revenue growth, improved proprietary-brand penetration and positive adjusted EBITDA as the hydroponics supplier continued its shift toward a commercial, proprietary brand-driven business model. Net sales increased 5.5% year over year to $43.2 million, while revenue rose 12.6% sequentially. The company said the quarter marked its third consecutive period of year-over-year revenue growth, supported primarily by its commercial business-to-business platform and higher adoption of proprietary products. → SoundHound AI Sends a Loud Signal After Its Q2 Earnings Beat GrowGeneration Riding the CBD Wave Higher “Our expanded commercial B2B business is the core growth driver of our strategy,” Co-founder and Chief Executive Officer Darren Lampert said. He said the company has expanded relationships with single-state and multistate operators, greenhouse growers and other commercial cultivation customers through its GrowGen Pro digital platform. Proprietary brands accounted for 39.7% of cultivation and gardening segment revenue in the second quarter, up from 32% a year earlier. The company had set a goal for proprietary products to represent 40% of cultivation and gardening revenue by the end of 2026, a level it effectively reached midway through the year. → 3 Dividend Champion Utilities for a Market That Can't Sit Still Grow Generation Stock a Domestic Cannabis Cultivation Play Lampert identified Char Coir, Drip Hydro, The Harvest Company, Dialed In and Power Si among the brands gaining adoption. He said approximately 90% of proprietary-brand sales currently flow through GrowGeneration’s own commercial division, but management sees additional potential through third-party distribution. During the question-and-answer session, Lampert said the company is increasing distribution efforts and has added technical advisers who work with cultivation facilities. He said the company believes its consumable brands have growth opportunities in hydroponics, cannabis, lawn and garden, and agricultural markets. → Is Wingstop's Growth Story Losing Steam? Cultivation and gardening sales rose to $34.9 million from $32.9 million in the prior-year period. The company’s MMI Storage Solutions segment generated $8.3 million in sales, compared with $8.1 million a year earlier. Management said the storage business benefited from demand across retail, industrial and commercial infrastructure projects, including warehouse modernization and automation investments. Gross profit rose to $12.3 million from $11.6 million a year earlier, while total gross margin increased to 28.5% from 28.3%. Gross margin also improved 310 basis points sequentially from 25.4% in the first quarter. Chief Financial Officer Greg Sanders said the higher mix of proprietary products and increased cultivation and gardening sales supported gross-profit growth. The gains were partially offset by higher transportation costs, while storage solutions gross-profit dollars declined modestly because of project mix and those costs. GrowGeneration continued to reduce its operating cost base. Store and other operating expenses fell about 21.9% year over year to $6.1 million, while total operating expenses declined 13.1% to $14.7 million. Selling, general and administrative expense increased 5% to $6.5 million, primarily because the company invested in commercial sales capabilities. Sanders said the increase in SG&A reflected a rebalancing of expenses following store closures, including more spending on commercial sales personnel, marketing and product trials. He said management expects SG&A to remain in the “low sixes” during the second half, potentially declining modestly from the second-quarter level. Depreciation and amortization fell 44% to $1.5 million, reflecting asset retirements associated with cost-reduction efforts and certain intangible assets reaching the end of their useful lives. The company’s GAAP net loss narrowed to $2 million, or $0.03 per share, from a loss of $4.8 million, or $0.08 per share, in the second quarter of 2025. Adjusted EBITDA was positive $0.3 million, compared with a $1.3 million adjusted EBITDA loss in the prior-year quarter. GrowGeneration reaffirmed its full-year revenue outlook of $162 million to $168 million and raised its adjusted EBITDA forecast to $2 million to $3 million. Its prior outlook called for approximately breakeven adjusted EBITDA. For the third quarter, the company expects revenue of $44 million to $46 million and positive adjusted EBITDA. Sanders said the higher full-year EBITDA outlook reflects underlying operational performance, stronger gross margin, cost reductions and the anticipated recognition of more than $2 million in previously incurred IEEPA tariff refunds during the third quarter. Management noted that third-quarter revenue guidance may be lower year over year because the comparable 2025 period included an unusually large volume of durable-product sales. Sanders said GrowGeneration expects revenue to be more evenly distributed in 2026 and still anticipates the third quarter will be its strongest period of the year from a revenue standpoint. Lampert added that the company expects higher third-quarter margins than in the year-earlier period due to a larger mix of consumables relative to durable products. He also said GrowGeneration expects a stronger fourth quarter than it recorded in 2025. GrowGeneration ended the quarter with $41 million in cash equivalents and marketable securities and no debt. During the period, the company repurchased 700,000 shares at an average price of $1.38 per share. About $9 million remained available under its $10 million share repurchase authorization as of June 30. Lampert said the company remains open to acquisitions in cannabis, agriculture and lawn-and-garden markets, but is not seeking revenue that it cannot integrate profitably. He also said GrowGeneration has become more active in evaluating lending opportunities connected to customer capital-expenditure projects. Looking ahead, Lampert said the company believes it is positioned to support additional customer investment activity regardless of the timing of a ruling on federal cannabis rescheduling proceedings. He cited GrowGeneration’s proprietary brands, infrastructure capabilities, systems integration offerings, customer relationships and balance sheet as differentiators. GrowGeneration Corp. is the largest chain of specialty hydroponic and organic garden centers in the United States, serving commercial and home growers of all experience levels. The company offers a broad assortment of cultivation supplies, including high-efficiency LED lighting, climate control systems, irrigation and fertigation equipment, growing media and nutrients. Through its retail outlets and e-commerce platform, GrowGeneration caters to indoor and outdoor horticultural operations, with a particular focus on the rapidly expanding legal cannabis market. In addition to its product offerings, GrowGeneration provides design, consulting and project management services for turnkey cultivation facilities. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "GrowGeneration Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Company Reaffirms 2026 Revenue Outlook and Raises Full Year Adjusted EBITDA(1) guidance to $2 million to $3 million Net Loss Improved by $2.8 million Year-Over-Year; Achieved Positive Adjusted EBITDA(1) of $0.3 million Net Sales of $43.2 million, up 12.6% Sequentially and 5.5% Year-Over-Year Proprietary Brand Penetration Increased to 39.7% of Cultivation and Gardening Revenue, a 770 basis point improvement Year-Over-Year $41.0 million in Cash, Cash Equivalents, and Marketable Securities with no Debt DENVER, Aug. 11, 2026 (GLOBE NEWSWIRE) -- GrowGeneration Corp. (NASDAQ: GRWG) (“GrowGeneration,” “GrowGen,” or the “Company”), one of the nation’s largest suppliers of specialty products for controlled environment agriculture (CEA), commercial cultivation, and garden centers, today announced financial results for the second quarter of 2026. Second Quarter 2026 Summary Net sales of $43.2 million, up 5.5% year-over-year; Proprietary brand sales as a percentage of Cultivation and Gardening net sales increased to 39.7%, compared to 32.0% in the second quarter of 2025; Gross profit margin of 28.5%, compared to 28.3% for the second quarter of 2025; Store and other operating expenses declined approximately 21.9% to $6.1 million, compared to $7.9 million for the same period in the prior year; Total operating expenses decreased $2.2 million, or 13.1%, to $14.7 million in the second quarter of 2026, compared to $16.9 million for the same period in the prior year; Net loss was $2.0 million compared to a net loss of $4.8 million for the same period in 2025; Adjusted EBITDA(1) gain of $0.3 million compared to a loss of $1.3 million for the comparable prior year period; and Cash, cash equivalents, and marketable securities of $41.0 million and no debt. Darren Lampert, GrowGen’s Co-Founder and Chief Executive Officer, commented, “GrowGeneration delivered a strong second quarter, representing our third consecutive quarter of year-over-year revenue growth driven by our commercial B2B business. Simultaneously, we expanded proprietary brand penetration to nearly 40% of Cultivation and Gardening revenue, while continuing to reduce costs and improve profitability. All of this contributed to GrowGen achieving positive Adjusted EBITDA for the second quarter. Our performance reflects the continued expansion of our commercial platform, the benefits of our streamlined cost structure, and disciplined execution against our strategic initiatives. As part of this strategy, we have also continued to maintain a strong balance sheet, ending the quarter with $41.0 million of cash, cash equivalents, and marketable securities and no debt. This financial strength also supported our stock repurchase activity during the quarter.” “Moving forward, we are committed to executing our strategy and continuing our transformation into a commercial, proprietary-brand-driven business. We remain focused on driving continued revenue growth, while improving our revenue mix, expanding margins, and driving greater profitability as we continue to advance toward our year-end goal of proprietary brands representing 40% of Cultivation and Gardening sales. Based on our second quarter performance and our current expectations for the second half of the year, including anticipated tariff-related benefits, we are increasing our full-year Adjusted EBITDA outlook to $2 million to $3 million. These results represent another meaningful step forward in GrowGeneration's transformation and reinforce our confidence that the strategic actions we've taken are delivering meaningful operational improvements,” added Mr. Lampert. Second Quarter 2026 Consolidated Results Net sales were $43.2 million for the second quarter of 2026, compared to $41.0 million for the second quarter of 2025. This represents the third consecutive quarter of year-over-year revenue growth, led by our commercial B2B business. Cultivation and Gardening net sales were $34.9 million for the second quarter of 2026, compared to $32.9 million for the same period in the prior year. Net sales in our Storage Solutions segment were $8.3 million for the second quarter of 2026, compared to $8.1 million in the second quarter of 2025. Once again, our quarterly proprietary brand sales exceeded our internal expectations, giving us additional confidence in our ability to expand gross margin for the long-term. Proprietary brand sales as a percentage of Cultivation and Gardening net sales increased to 39.7%, compared to 32.0% for the same period in the prior year, mainly driven by our strategic initiatives to increase sales mix of our expanded portfolio of proprietary brands. Gross profit was $12.3 million for the second quarter of 2026, compared to gross profit of $11.6 million for the second quarter of 2025. The year-over-year change was primarily a result of the increased sales volume of proprietary brand products and durable brand products within our Cultivation and Gardening segment in the second quarter of 2026. Gross profit margin was 28.5% for the second quarter of 2026, compared to 28.3% for the second quarter of 2025. The improvement was primarily driven by the increased mix of proprietary brand products within our Cultivation and Gardening segment, which generally have higher margins than non-proprietary brand products, partially offset by the increased sales mix of durable products, which generally have lower margins than consumable products. Total operating expenses, which include store operations and other operational expenses, selling, general, and administrative, estimated credit losses, depreciation and amortization, and impairment expense decreased in the second quarter of 2026 by $2.2 million, or 13.1%, to $14.7 million, compared to $16.9 million in the second quarter of 2025. Store and other operating expenses in the second quarter of 2026 declined by approximately 21.9% to $6.1 million, compared to $7.9 million in the second quarter of 2025, reflecting the benefits of reducing our retail footprint and our cost-reduction initiatives. Selling, general, and administrative expenses in the second quarter of 2026 were $6.5 million, compared to $6.2 million in the second quarter of 2025, an increase of 5.0%. GAAP net loss narrowed to $2.0 million in the second quarter of 2026, a $2.8 million improvement compared to a net loss of $4.8 million in the second quarter of 2025. The improvement was primarily driven by higher revenues, reduced operating expenses, and lower depreciation and amortization. Non-GAAP Adjusted EBITDA(1) was a gain of $0.3 million in the second quarter of 2026, a $1.6 million year-over-year improvement compared to a loss of $1.3 million in the second quarter of 2025, reflecting gross margin benefit of higher proprietary brand penetration and the continued realization of operational cost-reduction initiatives. Cash, cash equivalents, and marketable securities as of June 30, 2026 were $41.0 million. Inventory as of June 30, 2026 was $35.3 million, and prepaid and other current assets were $7.8 million. Total current liabilities, including accounts payable, accrued payroll, and other liabilities, as of June 30, 2026 were $25.6 million. Geographic Footprint Our geographic footprint for our Cultivation and Gardening segment spans 492,000 square feet of retail and warehouse space and includes 19 retail locations across 9 states as of June 30, 2026. We closed four retail locations during the six months ended June 30, 2026 as part of our ongoing network optimization strategy. We continue to serve our customers through our other retail locations and our online platforms, such as growgeneration.com, where customers can make direct purchases and access our GrowGen Pro Program, which provides dedicated services and solutions for multi-state operators, controlled environment agriculture and greenhouse customers, wholesale partners, and independent commercial cultivators. 2026 Outlook For the full year 2026, the Company reaffirmed that it expects net revenue in the range of $162 million to $168 million. The Company expects proprietary brand sales as a percentage of Cultivation & Gardening revenue to reach approximately 40% by year-end. The Company expects full year improvement in gross margin and operating expense efficiency during 2026. With this and the improvements made in its inventory base, the Company anticipates gross margins for the full year 2026 to be in the range of 27% to 29%. Based on these improvements, GrowGen expects to deliver Adjusted EBITDA in the range of $2 million to $3 million for the full year 2026. The Company’s full year 2026 guidance assumes profitability will build progressively throughout the year, with profitable third and fourth quarters reflecting the outdoor cultivation and gardening season as well as continued improvements in gross margin and a lower operating expense base compared to 2025. For the third quarter of 2026, the Company expects total consolidated net sales in the range of $44 million to $46 million, representing continued sequential growth. Footnotes Conference Call The Company will host a conference call today, August 11, 2026, at 4:30 p.m. Eastern Time to discuss financial results for the second quarter ended June 30, 2026. To participate in the call, please dial 1-(888)-699-1199 (domestic) or 1-(416)-945-7677 (international). The conference code is 76956. The call will also be webcast and can be accessed at https://app.webinar.net/Yp8aeqaewRr or on the Investor Relations section of the GrowGen website at: https://ir.growgeneration.com. A replay of the webcast will be available approximately two hours after the conclusion of the call and remain available for approximately 90 calendar days. About GrowGeneration Corp: GrowGen is one of the nation’s largest suppliers of specialty products for controlled environment agriculture (CEA), commercial cultivation, and garden centers. GrowGen carries and sells thousands of products, such as nutrients, additives, growing media, lighting, environmental control systems, and benching and racking, including proprietary brands such as Char Coir, Drip Hydro, Power Si, Ion lights, The Harvest Company, and more. The Company also operates an online superstore for cultivators at growgeneration.com, as well as a wholesale business for resellers, and a benching, racking, and storage solutions business, MMI Storage Solutions. To be added to the GrowGeneration email distribution list, please email [email protected] with GRWG in the subject line. Forward Looking Statements This press release contains predictions, estimates or other information that are considered forward-looking statements, including without limitation, statements regarding the Company’s financial outlook, guidance, and strategic expectations, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used herein, words such as “look forward,” “expect,” “believe,” “anticipate,” “estimate,” “guidance,” “outlook,” “projected,” “intend,” “may,” or variations of such words and similar expressions are intended to identify forward-looking statements. These forward-looking statements represent management’s current expectations and are based on assumptions and estimates that management believes are reasonable as of the date of this press release. You are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those anticipated due to a number of risks and uncertainties, including but not limited to those discussed in filings made with the United States Securities and Exchange Commission, available at: www.sec.gov, and on the Company’s website, at: www.growgeneration.com. The Company does not undertake any obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by applicable securities laws, whether as a result of new information, future events, or otherwise. Contact: KCSA Strategic CommunicationsPhilip CarlsonManaging DirectorT: 212-896-1233E: [email protected] Use of Non-GAAP Financial Information The following non-GAAP financial measures of EBITDA and Adjusted EBITDA are not in accordance with, or an alternative for, generally accepted accounting principles ("GAAP") and should be considered in addition to, and not as a substitute for, the most directly comparable GAAP financial measures. We believe these non-GAAP financial measures, when used in conjunction with their most directly comparable GAAP financial measures, net income (loss), provide meaningful supplemental information to both management and investors, facilitating the evaluation of performance across reporting periods, identify trends affecting our business, and project future performance. Management uses these non-GAAP financial measures for internal planning and reporting purposes, and we believe that these non-GAAP financial measures may be useful to investors in their assessment of our operating performance, our ability to generate cash, and valuation. In addition, these non-GAAP financial measures address questions routinely received from analysts and investors and, in order to ensure that all investors have access to the same data, we have determined that it is appropriate to make this data available to all investors. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. EBITDA and Adjusted EBITDA EBITDA and Adjusted EBITDA are non-GAAP financial measures commonly used in our industry and should not be construed in isolation as substitutions to net income (loss) as indicators of operating performance or as alternatives to cash flow provided by operating activities as a measure of liquidity (each as determined in accordance with GAAP). GrowGeneration defines EBITDA as net income (loss) before interest income, interest expense, income tax expense, depreciation and amortization, and Adjusted EBITDA as further adjusted to exclude certain items such as stock-based compensation, impairment losses, restructuring and corporate rationalization costs, and other non-core or non-recurring expenses and to include income from our marketable securities as these investments are part of our operational business strategy and increase the cash available to us. Set forth below is a reconciliation of EBITDA and Adjusted EBITDA to net loss (in thousands):

A week ago, GrowGeneration Corp. (NASDAQ:GRWG) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. GrowGeneration beat expectations with revenues of US$38m arriving 5.3% ahead of forecasts. The company also reported a statutory loss of US$0.08, 4.0% smaller than was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Following last week's earnings report, GrowGeneration's three analysts are forecasting 2026 revenues to be US$166.0m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 54% to US$0.15. Before this latest report, the consensus had been expecting revenues of US$164.7m and US$0.22 per share in losses. Although the revenue estimates have not really changed GrowGeneration'sfuture looks a little different to the past, with a considerable decrease in the loss per share forecasts in particular. Check out our latest analysis for GrowGeneration The average price target rose 6.7% to US$2.00, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic GrowGeneration analyst has a price target of US$2.50 per share, while the most pessimistic values it at US$1.50. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view. These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GrowGeneration's past performance and to peers in the same industry. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2026. That would be a definite improvement, given that the past five years have seen revenue shrink 19% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.2% annually. So it's pretty clear that, although revenues are improving, GrowGeneration is still expected to grow slower than the industry. The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that GrowGeneration's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time. With that in mind, we wouldn't be too quick to come to a conclusion on GrowGeneration. Long-term earnings power is much more important than next year's profits. We have forecasts for GrowGeneration going out to 2027, and you can see them free on our platform here. Before you take the next step you should know about the 2 warning signs for GrowGeneration that we have uncovered. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.