Tilray Brands (TLRY) shares fell 3.36% to $3.59 at Thursday's close, a decline that came despite the company reporting strong quarterly revenue growth. The stock later recovered 0.61% to $3.6120 in after-hours trading on October 8. The company reported a first-quarter net loss of $40 million, while revenue increased 23% year-over-year.

Record Revenue Overshadowed by $40 Million Net Loss

Tilray reported record first-quarter revenue of $257.1 million for the period ended August 31, 2026, an increase from $209.5 million in the same quarter last year. Gross profit climbed 35% to $77.5 million, supported by improvements across several business segments. The company's gross margin expanded from 27% to 30%, reflecting stronger profitability across its operations.

Despite the top-line growth, the company recorded a net loss of $40 million, driven largely by noncash charges. Such charges reduce reported earnings without a corresponding outlay of cash, a distinction that helps explain how the company posted a loss even as gross profit and margins improved. Tilray reported a loss of $0.32 per share, while adjusted losses totaled $3 million. Adjusted earnings per share showed a loss of $0.02 during the quarter. Adjusted EBITDA declined to $9.2 million from $10.2 million a year earlier, and management attributed part of the decline to approximately $1.7 million in global fuel surcharges.

Beverage Revenue Surges as Cannabis Sales Decline

The beverage business delivered the standout performance of the quarter, generating $101.5 million in revenue, an 82% annual increase that made it Tilray's largest revenue segment. The acquisition of BrewDog contributed to this growth and expanded the company's beverage operations. Beverage gross profit nearly doubled to $42 million, while margins improved from 38% to 41%. For a company built on cannabis, the segment crossover marks a visible step in its diversification strategy.

Cannabis revenue moved in the opposite direction, declining to $56.1 million from $64.5 million in the previous year. Gross profit in the segment slipped to $22 million, compared with $23.3 million previously. Despite the lower sales, the cannabis unit improved its gross margin to 39% from 36%.

Distribution revenue increased 14% to $84.3 million, supported by the company's pharmaceutical distribution operations. Wellness revenue remained near $15.3 million, although gross profit in that segment declined to $4.4 million. Taken together, the results highlighted diverging levels of performance across Tilray's cannabis, beverage, distribution, and wellness businesses.

Fiscal 2027 Outlook Maintained as Debt Reduction Continues

Tilray ended the quarter with $221.4 million in cash, restricted cash, and marketable securities. The company also reduced outstanding debt by $42 million during the fiscal year. These measures strengthened its financial position while management continued integrating recently acquired operations.

For fiscal 2027, Tilray reaffirmed its adjusted EBITDA forecast of $68 million to $75 million, a widely used gauge of operating performance that serves as the benchmark for that full-year outlook. The company expects stronger financial performance during the second half of its fiscal year, and management also expects the fourth quarter to contribute significantly to annual results.

Beyond the quarterly results, Tilray continues to expand its presence across cannabis, beverages, wellness, and pharmaceutical distribution markets. Under its agreement with Carlsberg, one of the world's largest brewing companies, the company will introduce the production and sales of selected brands in the United States. The partnership is set to begin on January 1, 2027, extending Tilray's beverage operations beyond its existing portfolio.

Source: Blockonomi