Full Year
Full Year Proprietary Brand Penetration Increased to 32.8% up from 24.2% in the prior year
Full Year GAAP Net Loss Improved by
Board Authorizes
2026 Outlook: Revenue of
Fourth Quarter 2025 Summary(1)
- Net sales of
$37.8 million , compared to prior year net sales of$37.4 million , an improvement of 1.0%; - Proprietary brand sales as a percentage of Cultivation and Gardening net sales increased to 35.8%, compared to 30.4% in the prior year;
- Gross profit margin of 24.1%, compared to 16.4% in the prior year;
- Store and other operating expenses declined approximately 26.8% to
$6.8 million , compared to$9.3 million for the same period in the prior year; - Total operating expenses decreased
$13.3 million , or 44.4%, to$16.7 million in the fourth quarter of 2025, compared to$30.1 million in the prior year; - Net loss improved to
$7.4 million , compared to a net loss of$23.3 million in the prior year which includes non-cash impairments; and - Adjusted EBITDA(3) loss of
$2.0 million compared to a loss of$8.1 million in the prior year.
Full Year 2025 Summary(2)
- Net sales of
$161.7 million , compared to$188.9 million in the prior year, reflecting retail store consolidations in 2024 and 2025. - Proprietary brand sales as a percentage of Cultivation and Gardening net sales increased to 32.8%, compared to 24.2% in the prior year;
- Gross profit margin of 26.8%, a 370 basis point improvement compared to 23.1% in the prior year;
- Store and other operating expenses decreased
$9.5 million , or 23.5%; - Net loss of
$24.0 million , compared to a net loss of$49.5 million in the prior year; - Adjusted EBITDA(3) loss of
$6.0 million , an$8.5 million improvement compared to a loss of$14.5 million in the prior year; and - Cash, cash equivalents, and marketable securities of
$46.1 million and no debt.
“As we enter 2026, GrowGen is operating with a significantly leaner cost structure, a growing portfolio of proprietary brands, and a strong balance sheet with
Fourth Quarter 2025 Consolidated Results
Net sales increased
Similar to what we have seen throughout 2025, fourth quarter proprietary brand sales continued to perform strongly, supporting the confidence we have 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 35.8%, compared to 30.4% 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
GAAP net loss was
Non-GAAP Adjusted EBITDA(3) was a loss of
Full Year 2025 Consolidated Results
Net sales were
Net sales of commercial fixtures within our Storage Solutions segment increased to
Gross profit was
Gross profit margin was 26.8% for the full year 2025, an increase of 370 basis points from a gross profit margin of 23.1% in 2024. The increase in gross profit margin was largely driven by the Cultivation and Gardening segment, which had a gross profit margin of 24.0% in 2025 as compared to 19.7% in 2024. The Storage Solutions segment gross profit margin decreased to 40.3% in 2025 from 45.6% in 2024.
Store and other operating expenses for the full year 2025 were
Selling, general, and administrative expenses for the full year 2025 were
GAAP net loss was
Non-GAAP Adjusted EBITDA(3) was a loss of
Cash, cash equivalents, and marketable securities as of
Total current liabilities, including accounts payable, accrued payroll, and other liabilities as of
Geographic Footprint
Our geographic footprint for our Cultivation and Gardening segment spans approximately 563,000 square feet of retail and warehouse space and includes 23 retail locations across 10 states. During 2025, we consolidated 8 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.
Share Repurchase Program
The Company also announced that its Board of Directors has authorized a share repurchase program for up to
2026 Outlook
For the full year 2026, the Company expects net revenue in the range of
The Company’s full year 2026 guidance assumes a softer first quarter for revenue and Adjusted EBITDA, given its usual seasonality, with profitable second and third 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.
Footnotes
- All comparisons are for the fourth quarter ended
December 31, 2025 versus the fourth quarter endedDecember 31, 2024 - All comparisons are for the year ended
December 31, 2025 versus the year endedDecember 31, 2024 - Adjusted EBITDA represents earnings before interest, taxes, depreciation, and amortization as adjusted for certain items as set forth in the reconciliation table of
U.S. GAAP to non-GAAP information and is a measure calculated and presented on the basis of methodologies other than in accordance with GAAP. Please refer to the Use of Non-GAAP Financial Information herein for further discussion and reconciliation of this measure to GAAP measures.
Conference Call
The Company will host a conference call today,
About
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 CharCoir, Drip Hydro, Power Si, Ion lights, The
To be added to the
Forward Looking Statements
This press release may include predictions, estimates or other information that might be considered forward-looking within the meaning of applicable securities laws. While these forward-looking statements represent current judgments, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect opinions only as of the date of this release. Please keep in mind that the Company does not have an obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. When used herein, words such as “look forward,” “expect,” “believe,” “anticipate,” “estimate,” or variations of such words and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are often discussed in filings made with the
Contacts:
Managing Director
T: 212-896-1233
E: GrowGen@kcsa.com
CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) | |||||||
| ASSETS | (Unaudited) | ||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 30,406 | $ | 27,471 | |||
| Marketable securities | 15,658 | 28,984 | |||||
| Accounts receivable, net of allowance for credit losses of | 10,668 | 7,361 | |||||
| Notes receivable, current, net of allowance for credit losses of | 507 | 1,056 | |||||
| Inventory | 38,776 | 40,295 | |||||
| Prepaid income taxes | 60 | 145 | |||||
| Prepaid and other current assets | 7,672 | 7,896 | |||||
| Total current assets | 103,747 | 113,208 | |||||
| Property and equipment, net | 9,795 | 15,493 | |||||
| Operating leases right-of-use assets, net | 27,050 | 34,453 | |||||
| Intangible assets, net | 3,326 | 8,779 | |||||
| 2,080 | 1,605 | ||||||
| Other assets | 1,042 | 814 | |||||
| TOTAL ASSETS | $ | 147,040 | $ | 174,352 | |||
| LIABILITIES & STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 8,775 | $ | 8,146 | |||
| Accrued liabilities | 3,269 | 2,358 | |||||
| Payroll and payroll tax liabilities | 2,589 | 2,655 | |||||
| Customer deposits | 4,015 | 2,404 | |||||
| Sales tax payable | 872 | 1,313 | |||||
| Current maturities of lease liability | 6,455 | 7,398 | |||||
| Total current liabilities | 25,975 | 24,274 | |||||
| Operating lease liability, net of current maturities | 23,022 | 29,633 | |||||
| Other long-term liabilities | 544 | 352 | |||||
| Total liabilities | 49,541 | 54,259 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ Equity: | |||||||
| Common stock; | 60 | 59 | |||||
| Additional paid-in capital | 377,128 | 375,677 | |||||
| Accumulated deficit | (279,689 | ) | (255,643 | ) | |||
| Total stockholders’ equity | 97,499 | 120,093 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 147,040 | $ | 174,352 | |||
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) | |||||||||||||||
| Three Months Ended | Year ended | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Net sales | $ | 37,821 | $ | 37,436 | $ | 161,741 | $ | 188,866 | |||||||
| Cost of sales (exclusive of depreciation and amortization shown below) | 28,703 | 31,309 | 118,466 | 145,144 | |||||||||||
| Gross profit | 9,118 | 6,127 | 43,275 | 43,722 | |||||||||||
| Operating expenses: | |||||||||||||||
| Store operations and other operational expenses | 6,828 | 9,322 | 30,732 | 40,198 | |||||||||||
| Selling, general, and administrative | 7,297 | 6,826 | 26,266 | 29,243 | |||||||||||
| Estimated credit losses (recoveries) | 84 | 152 | 437 | (58 | ) | ||||||||||
| Depreciation and amortization | 2,374 | 7,107 | 11,295 | 19,436 | |||||||||||
| Impairment loss | 130 | 6,655 | 130 | 6,875 | |||||||||||
| Total operating expenses | 16,713 | 30,062 | 68,860 | 95,694 | |||||||||||
| Loss from operations | (7,595 | ) | (23,935 | ) | (25,585 | ) | (51,972 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Other (expense) income | — | — | — | (13 | ) | ||||||||||
| Interest income | 363 | 701 | 1,730 | 2,703 | |||||||||||
| Interest expense | — | — | — | (70 | ) | ||||||||||
| Total other income | 363 | 701 | 1,730 | 2,620 | |||||||||||
| Net loss before taxes | (7,232 | ) | (23,234 | ) | (23,855 | ) | (49,352 | ) | |||||||
| Provision for income taxes | (189 | ) | (108 | ) | (191 | ) | (158 | ) | |||||||
| Net loss | $ | (7,421 | ) | (23,342 | ) | $ | (24,046 | ) | $ | (49,510 | ) | ||||
| Net loss per share, basic | $ | (0.12 | ) | $ | (0.39 | ) | $ | (0.40 | ) | $ | (0.82 | ) | |||
| Net loss per share, diluted | $ | (0.12 | ) | $ | (0.39 | ) | $ | (0.40 | ) | $ | (0.82 | ) | |||
| Weighted average shares outstanding, basic | 59,900 | 59,274 | 59,671 | 60,176 | |||||||||||
| Weighted average shares outstanding, diluted | 59,900 | 59,274 | 59,671 | 60,176 | |||||||||||
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).
Set forth below is a reconciliation of EBITDA and Adjusted EBITDA to net loss (in thousands):
| Three months ended | Year ended | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net loss | $ | (7,421 | ) | $ | (23,342 | ) | $ | (24,046 | ) | $ | (49,510 | ) | |||
| Provision for income taxes | 189 | 108 | 191 | 158 | |||||||||||
| Interest income | (363 | ) | (701 | ) | (1,730 | ) | (2,703 | ) | |||||||
| Interest expense | — | — | — | 70 | |||||||||||
| Depreciation and amortization | 2,374 | 7,107 | 11,295 | 19,436 | |||||||||||
| EBITDA | $ | (5,221 | ) | $ | (16,828 | ) | $ | (14,290 | ) | $ | (32,549 | ) | |||
| Share-based compensation | 274 | 318 | 1,513 | 2,422 | |||||||||||
| Investment income | 362 | 661 | 1,741 | 2,582 | |||||||||||
| Acquisition transaction costs | 10 | — | 69 | — | |||||||||||
| Impairment loss | 130 | 6,655 | 130 | 6,875 | |||||||||||
| Restructuring plan(1) | — | 310 | 1,141 | 3,009 | |||||||||||
| Consolidation and other charges(2) | 2,485 | 785 | 3,742 | 3,160 | |||||||||||
| Adjusted EBITDA | $ | (1,960 | ) | $ | (8,099 | ) | $ | (5,954 | ) | $ | (14,501 | ) | |||
| (1) Charges were related to the strategic restructuring plan announced in | |||||||||||||||
| (2) Consists primarily of expenditures related to legal settlements and contingencies, the activity of store and distribution consolidation and one-time severances outside of the restructuring plan announced | |||||||||||||||
