EDMONTON, Alberta, Oct. 27, 2026 (GLOBE NEWSWIRE) -- SNDL Inc. (NASDAQ/CSE: SNDL) ("SNDL" or the "Company") reported its financial and operational results for the third quarter ended September 30, 2026. All financial information in this press release is reported in millions of Canadian dollars unless otherwise indicated.
SNDL has also posted a supplemental investor presentation on its website, found at https://sndl.com.
The Company will hold a conference call and webcast presentation at 10:00 a.m. EDT (8:00 a.m. MDT) on Tuesday, October 27, 2026. The conference call details can be found below.
MANAGEMENT HIGHLIGHTS
-- Net revenue for the third quarter of 2026 was $238.0 million,
representing a -2.5% decrease compared with the same period of the prior
year. Cannabis Retail revenue increased by 0.7%, while Liquor Retail and
Cannabis Operations revenue declined by -3.3% and -27.7%, respectively.
-- Gross profit of $57.9 million for the third quarter of 2026 represents a
decline of $(6.3) million, or -9.8%, compared with the same period of the
prior year.
-- Gross margin (1) was 24.3% in the third quarter of 2026, a decrease of
2.0 percentage points compared with the same period of the prior year,
primarily reflecting weak performance of Cannabis Operations. Both retail
segments delivered strong margin expansion and reached new quarterly
records.
-- Operating loss was $(48.3) million for the third quarter of 2026,
reflecting a $52 million non-cash goodwill impairment charge related to
the Cannabis Operations segment.
-- Adj. operating income (1), which excludes impairment charges and
restructuring costs, returned to positive territory at $5.2 million, an
improvement of $14.8 million compared with the same period of the prior
year.
-- Cash flow was $(50.7) million, reflecting $60.8 million of strategic
investments in the U.S. and $10.0 million of additional share repurchases,
consistent with our capital allocation priorities.
-- Free cash flow (1) reached a new quarterly record of $20.0 million in the
third quarter of 2026, an increase of $3.3 million, or 19.5%, compared
with the same period of the prior year, including a $10.6 million benefit
associated with the initial unwinding of the Company's captive insurance
arrangement.
"Our third quarter results demonstrate improvement in SNDL's underlying financial performance, including positive adjusted operating income and record quarterly free cash flow generation," said Zach George, Chief Executive Officer of SNDL. "Cannabis Retail delivered record quarterly revenue and gross margin, Liquor Retail also reached a new record quarterly gross margin, and our Investments segment benefited from improved results from equity-accounted investees."
"Cannabis Operations remained below expectations and recorded a non-cash impairment. While the quarter was impacted by inventory issues arising from the first half, we are taking decisive action to simplify the portfolio, reduce costs and concentrate resources on product categories where SNDL's manufacturing capabilities, distribution reach and retail insights can support sustainable returns. The benefits of the actions taken during the quarter are expected to begin contributing to results in the fourth quarter. In addition to these immediate actions, the Company is initiating a strategic review of the Cannabis Operations segment to assess opportunities to improve its financial performance. The review will consider a range of strategic and operational alternatives, from potential asset divestitures to larger productivity initiatives."
"The completion of the restructuring of Surterra Holdings, Inc. ("Parallel") in July of this year, which reduced its debt burden by approximately US$842 million, and the subsequent rights offering, which increased our indirect equity ownership from approximately 67% to 92%, represent important steps in resetting Parallel's capital structure and providing liquidity to support inventory, product availability and critical supply-chain infrastructure. SNDL-funded investments by SunStream Bancorp Inc. ("SunStream") in a new cultivation facility in Gainesville, Florida, are expected to enhance Parallel's cost structure. We are excited by the opportunity presented by our investment in Parallel and are actively exploring the feasibility of transitioning our indirect economic exposure to direct ownership and consolidation of qualifying U.S. medical cannabis operations, subject to applicable legal, regulatory, accounting and Nasdaq requirements."
"We are encouraged by the progress made toward resolving the regulatory matters involving the Alcohol and Gaming Commission of Ontario ("AGCO"), which we expect will provide greater clarity for the Ontario franchise retail operations and future development opportunities, as further detailed later in this document and in the Q3 2026 Earnings Call presentation."
"Across SNDL, our priorities remain disciplined capital allocation, improved operating performance and long-term value creation for shareholders. We have demonstrated that commitment through significant share repurchases, and we intend to remain aggressive when we believe the opportunity to acquire our shares represents an attractive use of capital. The recently announced potential $50 million substantial issuer bid ("SIB") is a further step toward accelerating capital returns and reducing our outstanding share count," concluded Zach George.
TOTAL COMPANY HIGHLIGHTS
Three months ended September 30 Nine months ended September 30
($000s) 2026 2025 % Change 2026 2025 % Change
------------ -------- ------- -------- -------- ------- --------
IFRS
Financial
Measures
------------
Net revenue 237,994 244,219 -2.5% 669,666 693,902 -3.5%
Gross profit 57,886 64,177 -9.8% 167,047 188,419 -11.3%
Operating
income
(loss) (48,317) (11,050) -337.3% (65,272) (18,100) -260.6%
Change in
cash and
cash
equivalents (50,729) 32,357 -256.8% (107,622) 22,222 -584.3%
Non-IFRS
Financial
Measures
(1)
------------
Gross margin 24.3% 26.3% -2.0 pp 24.9% 27.2% -2.2 pp
Adjusted
operating
income
(loss) 5,249 (9,512) 155.2% (10,675) (12,713) 16.0%
Free cash
flow 19,954 16,692 19.5% 5,692 7,733 -26.4%
(1) Gross Margin is a supplementary financial measure calculated by dividing Gross Profit by Net Revenue. Adjusted operating income (loss) and Free Cash Flow are specified financial measures that do not have standardized meanings under IFRS and therefore may not be comparable to similar measures reported by other companies. See "Non-IFRS Measures" section below for further information.
BUSINESS SEGMENT HIGHLIGHTS
SNDL operates and reports its business through four segments: Liquor Retail, Cannabis Retail, Cannabis Operations, and Investments. Additionally, a consolidated total for Cannabis is presented, encompassing the combined results of the two Cannabis segments, along with the revenue elimination associated with the Cannabis Operations sales to the provincial boards that are expected to be subsequently repurchased by the Company's licensed retail subsidiaries for resale. Corporate and shared service expenses are reported as "Corporate".
Three months ended September Nine months ended September
30 30
($000s) 2026 2025(2) % Change 2026 2025(2) % Change
Net Revenue
----------------
Cannabis
Retail 85,605 85,021 0.7% 246,154 246,960 -0.3%
Cannabis
Operations 27,040 37,389 -27.7% 88,704 107,544 -17.5%
Intersegment
Eliminations (9,425) (17,579) 46.4% (38,757) (51,391) 24.6%
Total Cannabis 103,220 104,831 -1.5% 296,101 303,113 -2.3%
Liquor Retail 134,774 139,388 -3.3% 373,565 390,789 -4.4%
Investments -- -- 0.0% -- -- 0.0%
Total 237,994 244,219 -2.5% 669,666 693,902 -3.5%
Operating Income
----------------
Cannabis
Retail 5,244 5,047 3.9% 9,328 10,557 -11.6%
Cannabis
Operations (64,693) (10,882) -494.5% (80,836) (20,186) -300.5%
Total Cannabis (59,449) (5,835) -918.8% (71,508) (9,629) -642.6%
Liquor Retail 6,035 6,591 -8.4% 5,899 10,884 -45.8%
Investments 7,861 1,543 409.5% 8,340 1,775 369.9%
Corporate (2,764) (13,349) 79.3% (8,003) (21,130) 62.1%
Total (48,317) (11,050) -337.3% (65,272) (18,100) -260.6%
Adjusted
Operating
Income
----------------
Cannabis
Retail 5,284 5,047 4.7% 9,403 10,557 -10.9%
Cannabis
Operations (11,391) (10,220) -11.5% (27,303) (16,258) -67.9%
Total Cannabis (6,107) (5,173) -18.1% (17,900) (5,701) -214.0%
Liquor Retail 6,037 6,591 -8.4% 6,126 10,884 -43.7%
Investments 7,861 1,543 409.5% 8,340 1,775 369.9%
Corporate (2,542) (12,473) 79.6% (7,241) (19,671) 63.2%
Total 5,249 (9,512) 155.2% (10,675) (12,713) 16.0%
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