Alcanna Reports 14.7% Growth in Same Store Liquor Sales and Strong Growth in Profitability in the Third Quarter 2020

EDMONTON, Alberta, Nov. 13, 2020 (GLOBE NEWSWIRE) -- Alcanna Inc. (the “Company” or “Alcanna”) (TSX: CLIQ) today reported its unaudited financial results for the three and nine months ended September 30, 2020.

Third Quarter Financial Results and Business Update

Alcanna’s business in Q3 2020 continued with the strong performance reported for the first half of 2020 with significant increases on all fronts from the prior year.

Highlights for the three months ended September 30, 2020:

• Total sales from continuing operations were 10.9% higher, rising to $211.5 million from $190.7 million in 2019.
• Same-store liquor sales for Q3 2020 were up 14.7% while enhancing gross margins in the liquor operating segment to 23.1%, compared to 22.1% in the prior year.
• Total gross margin dollars rose 17.2% to $50.5 million from $43.1 million in the prior year.
• Operating profit before amortization, remeasurements and provisions for Q3 2020 rose 86.7% to $21.3 million from $11.4 million on an adjusted basis in the prior year, and 139.9% from $8.9 million on an unadjusted basis in the prior year.
• Profit before income taxes rose to $7.3 million, compared to an adjusted loss of $2.6 million in the prior year.
  

Alcanna’s liquor stores in all regions continue to register sales significantly higher compared to the prior year. The Company believes this is primarily a result of (i) the change in pricing strategy that was implemented in 2019 and continued into 2020, which was designed to regain lost market share and grow the customer base, and (ii) shifting customer consumption habits due to more people dining and entertaining at home and continuing to stay away from on-premise liquor establishments (restaurants, bars, lounges, sports venues, etc.). The Company further believes these new consumer behaviour patterns have become entrenched in people’s lifestyle choices and expects consumer behaviour will continue in this manner for the foreseeable future.

Cannabis retail sales have generally been in line with Management’s pre-COVID-19 expectations throughout the third quarter.

Total cannabis store sales for the third quarter of 2020 rose 23.6% to $16.0 million from $13.0 million in the prior year, and total gross margin dollars grew 44.6% to $5.4 million from $3.7 million.

The Company’s condensed interim consolidated financial statements and management’s discussion and analysis (“MD&A”) for the three and nine months ended September 30, 2020 will be available in the “Investor Centre – Financial Reports” section of the Company’s website at www.alcanna.com and will be filed on SEDAR and available at www.sedar.com.