DENVER — GrowGeneration Corp., one of the largest retailers and distributors of specialty hydroponic and organic gardening products in the United States, reported financial results for the fourth quarter and full year ended December 31, 2024.
Fourth Quarter 2024 Summary
- Net sales of $37.4 million, reflecting consolidation of 19 retail locations during 2024.
- Positive same-store sales of 1.0%.
- Proprietary brand sales as a percentage of Cultivation and Gardening net sales increased to 30.4% compared to 21.2% in the prior year.
- Gross profit margin of 16.4%, compared to 23.5% in the prior year, due to strategic inventory rationalizations in 2024.
- Net loss improved to $23.3 million compared to a net loss of $27.3 million in the prior year, includes non-cash impairments.
- Adjusted EBITDA loss of $8.1 million compared to a loss of $3.7 million in the prior year.
Full Year 2024 Summary
- Net sales of $188.9 million, displaying retail locations’ consolidation.
- Positive same-store sales of 0.9%.
- Proprietary brand sales as a percentage of Cultivation and Gardening net sales increased to 24.2% compared to 18.8% in the prior year.
- Gross profit margin of 23.1%, compared to 27.1% in the prior year, due to restructuring related activities including strategic product offering rationalizations in 2024.
- Store operating expenses decreased $7.9 million, or 16.4%.
- Net loss of $49.5 million compared to a net loss of $46.5 million in the prior year, primarily due to restructuring expenses.
- Adjusted EBITDA loss of $14.5 million compared to a loss of $5.6 million in the prior year.
- Cash, cash equivalents, and marketable securities of $56.5 million and no debt.
Darren Lampert, GrowGen’s co-founder and Chief Executive Officer, commented, “2024 was a pivotal year for GrowGeneration. We successfully completed an extensive strategic restructuring plan across our organization to transform GrowGen into a leaner, more efficient and product-driven company with a business-to-business (B2B) customer focus. As our industry matures, we continued our digital transformation of sales by launching our new B2B e-commerce platform in the fourth quarter, enhancing the customer purchasing experience while driving operational efficiencies across our supply chain. All of these actions are expected to reduce expenses by approximately $12 million on an annualized basis, improve margins, and return GrowGen to long term profitability. We concluded the year on a solid financial footing, with a strong cash position and no debt on our balance sheet.
“Importantly, our proprietary brands, led by Drip Hydro and Char Coir, delivered annualized growth of 8.4% on an absolute dollars basis. For the fourth quarter, over 30% of our Cultivation and Gardening revenue was derived from proprietary brand sales, compared to 21% in the same period of the prior year,” he continued. “This aligns with our goal for proprietary brands to reach 35% of Cultivation and Gardening net sales by the end of 2025, which we expect will contribute to significant margin improvement. Our focus throughout the year is to embrace channel expansion, including big-box retail and home gardening to further scale our proprietary brand product lines. With a strong balance sheet, a growing product portfolio, and our cost optimization strategies in place, we are confident that 2025 will be a year of strategic growth, profitability, and innovation for GrowGen.”
Fourth Quarter 2024 Consolidated Results
Net sales decreased $12.0 million to $37.4 million for the fourth quarter of 2024, compared to $49.5 million for the fourth quarter of 2023. Cultivation and Gardening net sales decreased $8.8 million, primarily due to the closure of 19 retail locations during 2024, which include the 12 redundant or underperforming retail locations consolidated in conjunction with our strategic restructuring plan announced in July 2024. This decrease in Cultivation and Gardening net sales was partially offset by same-store sales increasing 1.0%, primarily attributable to customer retention in markets where there were retail location closures. The remaining $3.2 million decrease in net sales was attributable to our Storage Solutions segment due to changes in the timing and size of projects in the comparable periods.
Proprietary brand sales as a percentage of Cultivation and Gardening net sales increased to 30.4% compared to 21.2% in the prior year, largely driven by our strategic initiatives to increase sales volume with our expanded portfolio of proprietary brands and various proprietary product launches.
Gross profit was $6.1 million for the fourth quarter of 2024, a decrease of $5.5 million compared to gross profit of $11.6 million for the fourth quarter of 2023. Gross profit margin was 16.4% for the fourth quarter 2024, compared to 23.5% for the fourth quarter of 2023, the decrease was primarily due to the strategic rationalization of our product offerings as part of our restructuring plan.
GAAP net loss was $23.3 million in the fourth quarter of 2024, a $4.0 million improvement compared to a net loss of $27.3 million in the fourth quarter of 2023. The improvement in GAAP net loss was primarily due to a $9.7 million reduction of operating expenses, including non-cash impairment losses of $6.7 million and $15.7 million in 2024 and 2023, respectively, and reduced store operating expenses aligned to the retail store consolidations.
Non-GAAP Adjusted EBITDA was a loss of $8.1 million in the fourth quarter of 2024, compared to a loss of $3.7 million in the fourth quarter of 2023.
Full Year 2024 Consolidated Results
Net sales declined $37.0 million to $188.9 million for the full year of 2024, compared to $225.9 million for 2023.
The decrease in net sales was primarily related to our Cultivation and Gardening segment, which had net sales of $163.5 million for the full year 2024 compared to $194.5 million for 2023. Cultivation and Gardening’s decrease in net sales was primarily driven by the fiscal 2024 consolidation of 19 retail locations, which include the 12 redundant or underperforming retail locations consolidated in conjunction with our strategic restructuring plan. Cultivation and Gardening’s same-store sales increased 0.9%, primarily attributable to commercial sales growth and customer retention in markets where there were retail location closures. Proprietary brand sales as a percentage of Cultivation and Gardening net sales for the full year 2024 increased to 24.2% as compared to 18.8% for the prior year largely driven by our strategic initiatives to increase sales volume with our expanded portfolio of proprietary brands and products and various proprietary product launches. The percentage of Cultivation and Gardening net sales related to consumable products increased to 72.2% in 2024 from 71.7% in the prior year primarily due to increased brand adoption of proprietary growing media and nutrient products.
Net sales of commercial fixtures within our Storage Solutions segment decreased to $25.4 million in 2024 compared to $31.4 million in 2023, primarily due to a similar volume of projects with a decrease in average project size.
Gross profit was $43.7 million for the full year 2024 compared to $61.3 million in 2023. The decrease was primarily driven by lower Gardening and Cultivation net sales, largely as a result of the 19 store consolidations in fiscal 2024 as well as the effects of our strategic restructuring plan, including the estimated $0.9 million in inventory sales discounts, the additional $1.0 million of inventory disposal costs, and the strategic rationalization of our product offerings in 2024. Additionally, gross profit from our Storage Solutions segment decreased $2.3 million in 2024 compared to 2023, in line with the decrease in revenue.
Gross profit margin was 23.1% for the full year 2024, compared to gross profit margin of 27.1% for 2023. The decrease was largely driven by the Gardening and Cultivation segment, which had a gross profit margin of 19.7% for 2024 as compared to 24.4% in the prior year, due to the effects of the strategic restructuring plan, including the inventory disposal costs, sales discounts, and product offering rationalization, reduced inventory discounts from vendors, and continued industry pricing compression on distributed products. The decrease was partially offset by an increase in the Storage Solutions segment gross profit margin to 45.6% in 2024 from 44.1% in 2023.
Store and other operating expenses for the full year 2024 were $40.2 million compared to $48.1 million in 2023, a decrease of 16.4%, primarily driven by the 19 store consolidations in 2024.
Selling, general, and administrative expenses for the full year 2024 were $29.2 million compared to $29.8 million for 2023, a decrease of 1.9%. Additionally, we recorded non-cash impairment losses of $6.9 million and $15.7 million in 2024 and 2023, respectively, primarily related to our goodwill and intangible assets.
GAAP net loss was $49.5 million for the full year 2024 compared to $46.5 million in 2023.
Non-GAAP Adjusted EBITDA(3) was a loss of $14.5 million in 2024, compared to Adjusted EBITDA loss of $5.6 million in 2023.
Cash, cash equivalents, and marketable securities as of December 31, 2024 were $56.5 million. Inventory as of December 31, 2024 was $40.3 million, and prepaid and other current assets were $7.9 million.
Total current liabilities, including accounts payable, accrued payroll, and other liabilities as of December 31, 2024 were $24.3 million.
Geographic Footprint
Our geographic footprint for our Cultivation and Gardening segment spans approximately 724,000 square feet of retail and warehouse space and includes 31 retail locations across 12 states. During 2024, we consolidated 19 retail stores where we generally expect to be able to serve the same customer base through a single location, thereby reducing redundancies in cost structure.
Full Year 2025 Outlook
- Full year 2025 net revenues in the range of $170 million to $180 million
- Full year 2025 Adjusted EBITDA from a $2 million loss to a $2 million profit
- Full year 2025 gross profit margin in the range of 29% to 31%
About GrowGeneration Corp.
GrowGen is a leading developer, marketer, retailer, and distributor of products for both indoor and outdoor hydroponic and organic gardening, as well as customized storage solutions. The company 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 Charcoir, Drip Hydro, Power Si, Ion lights, The Harvest Company, and more. Incorporated in Colorado in 2014, GrowGen is among the largest chains of specialty retail hydroponic and organic garden centers in the United States. The company also operates an online superstore for cultivators as well as a wholesale business for resellers, and a benching, racking, and storage solutions business, Mobile Media or MMI.
