Why Tilray Brands Stock Crashed 12% on Friday

Tilray Brands (NASDAQ: TLRY) stock tumbled 12% through 9:50 a.m. ET after missing analyst sales forecasts in its Friday morning report.

Heading into the news, Wall Street analysts anticipated Tilray would report sales of $216.3 million for its fiscal second quarter of 2025, ended Nov. 30, but Tilray actually collected just $211 million. On the plus side, Tilray beat expectations for earnings. Analysts forecast a $0.01 per share adjusted loss for the quarter, but Tilray says it broke even.

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Tilray Q2 earnings

Despite missing on revenue, Tilray boasted its 9% year-over-year growth to $211 million, setting a new record for Q2 revenue. International cannabis sales grew 25%, beverage revenue grew 36%, and wellness revenue grew 13%.

Management further noted that gross profit increased 29%, with growth extending "across all four business segments."

Still, reading between the lines reveals some surprising weaknesses at this Canadian cannabis company. Take growth in international cannabis sales for example. At 25%, that was more than twice as fast as overall revenue growth. Yet, while management didn't emphasize the point, it turns out that total cannabis sales didn't grow at all. They shrank by 1.5%, to $66 million.

For a company whose main claim to fame is that it sells legal marijuana, that's not a good number.

Is Tilray stock a buy?

Speaking of numbers, let's also take a closer look at Tilray's earnings number. Breaking even on earnings sounds better than losing money. Still, only Tilray's adjusted earnings broke even; its generally accepted accounting principles (GAAP) results did not. On the bottom line, net earnings for Q2 were a loss of $85 million, and per share, that worked out to a loss of $0.10 -- nearly 50% worse than last year's $0.07 per share Q2 loss.

Long story short, Tilray is still losing money, just like it lost money in each of the last six years, and just like it's expected to keep losing money next year, and the year after that. Until Tilray starts earning a profit, it's hard to call this stock a buy.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Tilray Brands. The Motley Fool has a disclosure policy.