In a news release, Stem Holdings Inc. dba Driven by Stem (STEM:CSE; STMH:OTCQX) announced its Q3 FY21 quarter financial results, highlighting that its sales during the period were an all-time high.
"We are building our footprint with a continued strong focus on cost reduction, operational excellence, and customer acquisition and retention to drive top-of-the-line sales and improved margins as we did this quarter," CEO Adam Berk said in the release.
Stem's gross sales during Q3 FY21 totaled $12.4 million ($12.4M), up 104% percent year over year (YOY) from $6.1M. Net sales came in at $10.6M, reflecting a 103% YOY increase from $5.2M.
Total dispensary sales during the quarter also increased YOY, by 19%, the result of a push to improve customer service, the release noted. During the quarter, Stem launched its Budee delivery platform in Portland, Ore., which likely contributed to the 7% YOY increase in sales in that state.
As for Stem's gross margin for the quarter, it was 14%, down YOY from 34%.
This decline is due to a recategorization of driven deliveries expenses in that the company moved them from general and administrative expenses to cost of goods sold. Had Stem not made this accounting change, its quarterly gross margin would have been 41.8%, reflecting a YOY increase.
Looking forward, some of Stem's near-term goals are to continue rolling out Budee in Oregon to serve most of the state, starting with Eugene in October 2021. It also aims to continue gaining market share with Budee in California. Slated for next month, September, is the debut of Stem's first dispensary, with delivery by Budee, in Michigan.
Also, Stem plans to continue expanding its cannabis growing, particularly at its Mulino and Springfield, Ore. farms. At all of its five Oregon facilities, the company is developing new core and new genetics.
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