SNDL (NASDAQ:SNDL) Issues Earnings Results, Misses Estimates By $0.14 EPS

SNDL (NASDAQ:SNDL) issued its quarterly earnings results on Tuesday. The company reported ($0.15) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.01) by ($0.14), FiscalAI reports. SNDL had a negative return on equity of 2.01% and a negative net margin of 2.36%. The firm had revenue of $167.18 million during the quarter, compared to analysts’ expectations of $164.18 million.

Here are the key takeaways from SNDL’s conference call:

• Profitability and cash flow improved: SNDL generated record quarterly free cash flow of CAD 20 million and returned to positive adjusted operating income of CAD 5.2 million, despite lower revenue and gross profit.
• Both retail segments achieved record gross margins of 27.0%. Cannabis Retail revenue reached a quarterly record, while Liquor Retail benefited from pricing, product mix, private-label momentum, and procurement productivity.
• Cannabis Operations remained a major weakness: revenue fell 27.7% year over year, gross margin was negative 6%, and adjusted operating loss widened to CAD 11.4 million. SNDL is exiting unprofitable domestic dried flower, cutting costs, and conducting a strategic review that could include asset divestitures.
• SNDL repurchased 5.4 million shares for approximately $10 million during the quarter and proposed a substantial issuer bid of up to $50 million, while increasing its indirect ownership of Parallel to approximately 92% and expanding exposure to its U.S. medical cannabis operations.
• A potential resolution of Ontario regulatory matters could normalize franchise operations and provide approximately CAD 30 million of third-party financing, but deconsolidation would reduce reported trailing revenue by about CAD 105 million, with a significantly smaller impact on operating income.

SNDL Stock Down 0.4%

SNDL stock traded down $0.01 during mid-day trading on Wednesday, hitting $1.29. The company had a trading volume of 523,644 shares, compared to its average volume of 1,742,022. The stock has a market cap of $333.33 million, a price-to-earnings ratio of -21.58 and a beta of 0.93. SNDL has a 1 year low of $1.13 and a 1 year high of $2.34. The company has a quick ratio of 3.11, a current ratio of 4.76 and a debt-to-equity ratio of 0.12. The business has a fifty day moving average of $1.32 and a 200 day moving average of $1.40.

Analysts Set New Price Targets

A number of brokerages recently commented on SNDL. Weiss Ratings upgraded shares of SNDL from a “sell (e+)” rating to a “sell (d-)” rating in a research note on Wednesday, August 26th. Wall Street Zen lowered SNDL from a “hold” rating to a “sell” rating in a report on Saturday, August 1st. One investment analyst has rated the stock with a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the company presently has a consensus rating of “Reduce”.

Key Stories Impacting SNDL

Here are the key news stories impacting SNDL this week:

• Positive Sentiment: SNDL reported record third-quarter free cash flow of approximately C$20 million and positive adjusted operating income of C$5.2 million, a significant improvement from the year-ago loss. Cannabis Retail also achieved record quarterly revenue and gross margin. SNDL Reports Third Quarter 2026 Financial and Operational Results
• Positive Sentiment: The board intends to pursue a substantial issuer bid of up to C$50 million, potentially reducing shares outstanding by more than 10%, while continuing its repurchase program. SNDL ended the quarter with approximately C$617.8 million in unrestricted cash, marketable securities and investments and no debt. SNDL Equity Buyback
• Positive Sentiment: SNDL increased its indirect ownership of U.S. medical cannabis operator Parallel from roughly 67% to 92% after participating in a rights offering, strengthening its exposure to a potential U.S. growth opportunity.
• Neutral Sentiment: Management is conducting a strategic review of Cannabis Operations, including potential divestitures and productivity initiatives. The company also announced plans to invest more heavily in U.S. cannabis while evaluating direct ownership of qualifying Parallel operations. SNDL Strategic Review and U.S. Cannabis Investment
• Negative Sentiment: Third-quarter revenue declined 2.5% year over year to C$238 million, while gross profit fell 9.8%. Cannabis Operations revenue plunged 27.7% and remained unprofitable, offsetting better retail performance.
• Negative Sentiment: SNDL recorded a C$52 million non-cash goodwill impairment, inventory-related charges and a C$50.8 million net loss. More than 30% of the Kelowna manufacturing workforce was cut, underscoring the severity of the segment’s operational problems. SNDL Kelowna Layoffs

SNDL Company Profile

SNDL Inc is a Canada-based cannabis and liquor company headquartered in Calgary, Alberta. Formerly known as Sundial Growers Inc, the company began as a licensed cannabis producer and has expanded into cannabis cultivation, processing, branded product sales and retail operations.

SNDL offers cannabis products through brands that have included Sundial, Top Leaf, Palmetto and Value Buds. Its cannabis business serves the Canadian adult-use and medical markets through provincial distribution systems and company-operated or affiliated retail locations.