Canopy Growth Corp. (TSX:WEED) reported fiscal first-quarter results that beat analyst expectations.
The better-than-expected results come despite a decline in recreational cannabis sales in Canada due to increased competition. However, Canopy Growth, the world's largest cannabis company by market valuation, said that its medical cannabis business outperformed in the three-month period ending June 30.
At the same time, the company's recreational cannabis business saw an 11% decline in revenue to $44.2 million as COVID-19 impacted Canopy's retail operations across the country. Additionally, increased competition led to a decline in dried flower market share.
The Smiths Falls, Ontario-based company reported first-quarter revenue of $110.4 million, up 22% from the same quarter a year earlier, while posting a loss of $128.3 million, a 34% improvement from 2019. Analysts had expected Canopy to report $98.1 million in revenue in the quarter while posting a loss of $151.3 million.
Canopy Growth's better-than-expected results end a recent streak of disappointing quarters that were overshadowed by the company's efforts to restructure its operations. The company shed hundreds of staff over the past several months while announcing that it would shut down cultivation operations in Canada and the U.S. to contain costs.
Canopy Growth's share of the recreational cannabis market has faced pressure from competitors such as Aphria and Aurora Cannabis. Analysts estimate Canopy Growth has about 15% of the Canadian recreational cannabis market, down from 20% at the beginning of this year.
