Hexo (HEXO, $2.83) issues lower-than-expected revenue guidance for Q4, withdraws 2020 projection

Hexo warned that its fourth-quarter revenue will miss expectations due to "lower-than-expected product sell-through."

The cannabis company said that it expects fourth-quarter revenue to range between C$14.5 million to C$16.5 million ($10.9 million to $12.4 million), below Wall Street's forecast of C$24.8 million ($18.6 million). For the full-year, the company projects revenue to range between C$46.5 million and C$48.5 million ($34.9 million to $36.4 million).

Hexo was withdrawing its 2020 financial outlook due to regulatory uncertainty across the pan-Canadian system, and jurisdictional decisions that it thinks will limit the availability and types of cannabis derivative products.

"While we are disappointed with these results, we are making significant changes to our sales and operations strategy to drive future results," said Sebastien St-Louis, Hexo's CEO and co-founder. 

On Monday, Michael Monahan, Hexo’s chief financial officer, resigned from the company, due to his "family's needs." Stephen Burwash, the vice president of strategic finance, stepped in as his replacement.

Contributor

Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.