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COVID stock of the day: CLIQ


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COVID stock of the day: CLIQ
 

 

ALCANNA REPORTS 21.7% SALES GROWTH FOR 2019 AND A GROSS MARGIN INCREASE OF 12.8% – FOURTH QUARTER SALES INCREASED BY 21.5% 0VER THE PRIOR YEAR.


2019 FOURTH QUARTER COMMENTARY

For the year ended December 31, 2019 Alcanna achieved a 21.7% growth in total sales versus 2018. The fourth quarter sales increase was 21.5% over Q4 in 2018. Gross margin dollars for the year increased to $178.3 million – a 12.8% increase from 2018.

“Alcanna continued on course throughout 2019 with an aggressive strategy begun in 2018 to regain and grow market share in our core Alberta liquor business and to establish Nova Cannabis as a leader in the Canadian cannabis retail industry and we delivered on that strategy,” said James Burns Vice Chair and CEO. “Starting with only a few discount stores at the beginning of the year Alcanna ended 2019 as the largest discount banner in Alberta with 92 locations. Over the course of the year Alcanna opened 3 new large-format Wine and Beyond stores and essentially completed our two-year accelerated plan to renovate our Alberta liquor stores - ending the year with a refreshed network of stores better positioned to compete over the long term in an intensely competitive market. And finally, Alcanna began 2019 with five Nova Cannabis retail locations in Alberta and now have thirty opened, along with a highly successful entrance into the Ontario market with a store in Toronto. With all of this accomplished, the Company ends 2019 with our liquor CAPEX program largely behind us and in an excellent position to return to turning sales into bottom-line results.”

“In late 2019, the Company started to slowly but successfully recalibrate margins in the Alberta liquor banners to restore bottom line results. However, the positive results of this recalibration initiative on gross margin percentage were more than offset by the significant increase in robberies and thefts across the Alberta liquor retail industry, a decision made in the fourth quarter to slightly lower margins in our Liquor Depot banner to reduce the gap in pricing compared to the discount banners, and the higher than anticipated customer trade over from regular priced items to promotional items during the holiday season, which we attribute to the weak economic conditions and consumer and public confidence in Alberta. Alcanna has been working closely with law enforcement and the provincial government to address the increase in robberies and thefts throughout the Alberta liquor retail industry and anticipates a gradual reduction in these occurrences throughout 2020 as a result of strategies initiated in late 2019 and into 2020. We have adjusted our promotional, merchandising and buying strategies in early 2020 to address the changes in customer buying patterns and we are aiming at improving our gross margin percentages throughout 2020 as a result,” said Mr. Burns.

Fourth quarter and subsequent event highlights:

As of today, Alcanna has 30 Nova Cannabis retail stores operating in Alberta, of which 12 opened in the fourth quarter of 2019, and another 7 opened in January 2020. Alcanna is poised to expand Nova Cannabis into Ontario now that the Ontario government has opened the licensing process and anticipates constructing and opening 10 to 20 new stores in Ontario in 2020 dependant on finding excellent locations, the pace at which the Ontario regulator can grant new licences, cannabis supply, and the competitive environment.
Same-store sales in Canadian liquor increased by 4.6% and total liquor sales increased by 19.7% compared to Q4 2018.
The third new Wine and Beyond store for 2019 opened in Red Deer, Alberta on November 21, 2019. We are ready to expand Wine and Beyond into Ontario if the Ontario government’s reform of liquor retail permits the private retailing of alcohol on a basis similar to Alberta, which would allow an appropriate return on capital.
Alcanna made reductions to corporate overhead of approximately $1 million annually in the fourth quarter, which is in addition to the $2 million in annual savings made in the third quarter.
The consolidation of the management of the Company’s liquor business is expected to provide further opportunities for overhead reduction in 2020.





 https://www.globenewswire .. RIOR-YEAR.html

In at $1.60. Waiting for it to quadruple.

@kami @Brazi D


Last edited by Illuminati; 03-25-2020 at 11:00 AM..
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