Hydrofarm Q2 sales down

Overview

• Hydrofarm fiscal Q2 net sales fell 28.4%, missing analyst expectations, per LSEG data

• Gross profit margin declined due to lower sales and restructuring costs

• Company initiated restructuring plan, expecting over $3 mln annual savings

Outlook

• Hydrofarm reaffirms improved Adjusted Gross Profit Margin for 2025

• Company expects reduced Adjusted SG&A expenses in 2025

• Hydrofarm anticipates positive free cash flow for final nine months of 2025

• Company plans capital expenditures under $2 mln for full year 2025

Result Drivers

• INDUSTRY HEADWINDS - Net sales declined 28.4% due to industry oversupply and a decrease in product volume/mix

• RESTRUCTURING COSTS - Gross profit margin impacted by $3.3 mln in non-cash restructuring costs

• COST REDUCTIONS - SG&A expenses decreased due to decrease in compensation costs from lower headcount and restructuring initiatives

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "hold"

• The average consensus recommendation for the heavy machinery & vehicles peer group is "buy."

• Wall Street's median 12-month price target for Hydrofarm Holdings Group Inc is $7.50, about 39.9% above its August 11 closing price of $4.51

Press Release: ID:nGNX3pgGnL