Overview

* Hydrofarm ( HYFM ) 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 ( HYFM ) reaffirms improved Adjusted Gross Profit Margin for 2025

* Company expects reduced Adjusted SG&A expenses in 2025

* Hydrofarm ( HYFM ) 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 toin compensation costs from lower headcount and restructuring initiatives

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Sales Miss $39.24 $51 mln

mln (1

Analyst)

Q2 EPS -$3.63

Q2 Net -$16.86

Income mln

Q2 Gross $2.79

Profit mln

Q2 -$13.35

Operatin mln

g Income

Q2 -$16.96

Pretax mln

Profit

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 ( HYFM ) is $7.50, about 39.9% above its August 11 closing price of $4.51

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)