MedMen Pre-Announces Large Sales Decline and Massive Tax Bill

Through an SEC filing announcing its inability to file its 10-Q on a timely basis, MedMen (CSE: MMEN) (OTC: MMNFF) disclosed that its financials deteriorated in its fiscal Q2. It suggested that revenue was $33.8 million, which is a decline of 23% from a year ago and below the analyst consensus of $38.8 million. In its fiscal Q1, it reported revenue of $35.6 million. It blamed the weakness on COVID-19’s impact on retail traffic and tourism in California and Nevada. It noted substantial growthin Florida and Illinois compared to a year ago.

MedMen expects its operating loss in Q2 to improve to $42.9 million compared to $69.3 million a year ago, with gross margin improving to 39.9% from 29.1% and SG&A declining by 47.2% from the year-ago quarter. The operating loss is a sharp deterioration from Q1’s $8.1 million.

The company expects its net income to deteriorate sharply, with a net loss of $69.6 million compared to $56.7 million a year ago, citing a $38.2 million increase in its provision for income taxes driven by 280E.

The company will be hosting a call on February 16th.

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