11:17 AM EDT, 04/09/2024 (MT Newswires) -- Shares of Tilray Brands ( TLRY ) plunged on Tuesday after the cannabis distributor reported weaker-than-expected revenue growth for the fiscal third quarter and tempered earnings expectations for the full year.

Revenue increased to $188.3 million for the three months ended Feb. 29 compared with $145.6 million a year ago but missed the $198.3 million average analyst estimate on Capital IQ. The company reported a break-even point on an adjusted per share basis, down a penny from the same period of 2023. Its share price sank 21% in Tuesday trade.

Cannabis revenue advanced 33% to $63.4 million, largely reflecting the acquisitions of Hexo and Truss and growth in the Canadian medical and adult use, as well as wholesale and international markets. Beverage-alcohol revenue climbed 165% to $54.7 million, driven by Tilray's 2023 acquisition of craft beverage brands.

"Over the past several years, our playbook of expanding our cannabis business to complementary markets such as beverages and hemp-based consumer products has positioned us well to navigate the current environment and to benefit from future growth opportunities," Chief Executive Irwin Simon said in a statement.

Wellness revenue grew 12% to $13.4 million. Distribution revenue decreased to $56.8 million from $65.4 million due to a short-term regulatory challenge.

For fiscal 2024, which ends May 31, Tilray lowered its guidance for adjusted earnings before interest, taxes, depreciation and amortization to between $60 million and $63 million from the $68 million to $78 million view it reiterated in January. In its 2023 fiscal year, adjusted EBITDA grew 28% to $61 million.

The company no longer expects to generate positive adjusted free cash flow in the ongoing fiscal year, changing its stance from January amid delayed timing for collecting cash on various asset sales. While cash flow is expected to be "very strong" in the fourth quarter, Tilray will continue to prudently manage capital expenditures, Chief Financial Officer Carl Merton told analysts on a conference call, according to a Capital IQ transcript.

The updated EBITDA guidance reflects performance over the first three fiscal quarters, more than $12 million year-to-date price compression in the cannabis business and expectations for the ongoing fourth quarter, which is traditionally its lowest due to seasonality, according to Merton. "The fourth quarter seasonality improvement is a function of our beer business leading up to the summer, a historically busy season," he said.

Price: 2.03, Change: -0.56, Percent Change: -21.86