Aurora Cannabis Inc. reported another disappointing quarter with sales coming below expectations, as COVID-19 lockdowns and greater competition overshadowed gains made in its medical cannabis business.
Aurora reported $55.1 million in revenue in the quarter, down 25 per cent from a year earlier and well below the $68.8 million that analysts were expecting. The company also booked an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $24 million in its third quarter, a 52 per cent improvement from last year – but wider than the $10-million loss that analysts expected.
Much of Aurora's sales woes came from a steep decline in its Canadian recreational cannabis business. Sales in that segment fell 53 per cent to $18 million, a result of weak retail activity caused by COVID-19 lockdowns as well as more competition in the market, notably in the value category that Aurora had a commanding presence in a year earlier.
Aurora's net selling price of cannabis rose to $5.00 per gram in the three months ending March 31, from $4.45 in the previous quarter.
"The question that I would have proposed [to investors] is that in the recreational market, would you like us to go to the bottom of the barrel and sell discount flower, lose money but post a big top line market? Probably not," said Miguel Martin, chief executive officer of Aurora Cannabis, in a phone interview. "So the question is: how do you ride it out? You ride it out by being reasonable in where you try to play."