Over the past year or so, Aphria Inc (TSX:APHA) (NYSE:APHA) has emerged as one of the more promising companies in the cannabis sector, and on Wednesday, the company released its financial results for its most recent quarter. The company’s sales soared by as much as 65% in the quarter, and that resulted in a rally in the Aphria stock.
On Wednesday, Aphria stock went up as much as 14% but ended higher by 4%. However, investors should also keep in mind that the company’s CFO Carl Merton withdrew Aphria’s projections for the full year. The full-year revenue guidance had been set in the C$575 million to C$625 million.
During the conference call yesterday, Merton said that the company was unable to accurately forecast the full-year revenues in light of the chaos brought about by the coronavirus pandemic. In addition to that, it is important to mention that the financial year concludes in May for Aphria, and the company had already cut its forecasts in the second quarter.
The coronavirus pandemic has resulted in widespread lockdowns, and key provinces like British Columbia, Alberta, and Ontario were closed from deliveries at the end of March for a week. Many of the states have decided against making purchases at all.
For instance, the most populous state Ontario canceled purchases for two weeks due to the coronavirus crisis. British Columbia has closed its stores, and on the other hand, Alberta has dialed down it’s ordering by as much as 40% due to the current situation. However, Quebec has proven to be a glimmer of hope for many companies. Merton said that sales at regular retail stores soared by 40%, and online sales jumped by 200% since the lockdowns went into effect.
Aphria has taken some important steps to tackle the situation as well. It has put a stop to any fresh capital expenses and in addition to that, cut its marketing budget by as much as C$4 million in Q4.