SNDL Q3 revenue slips 2.5% as company shifts product mix

what happened

Canadian cannabis and liquor retailer SNDL reported third-quarter revenue down 2.5% year on year, to C$238 million, according to Reuters. Gross profit and gross margin both declined because of weak performance in Cannabis Operations. Adjusted operating income, however, moved into positive territory from a loss a year earlier.

The company said the revenue drop mainly reflected its exit from the unprofitable dried flower category and a push toward higher-value products. It also cut manufacturing costs and operating expenses, including workforce reductions at its Kelowna facility. Liquor Retail profit fell due to heavier promotional support and costs tied to new store openings.

SNDL is also running a strategic review of Cannabis Operations. It expects cost reduction measures to benefit results starting in the fourth quarter of 2026, and it anticipates that its Value Buds franchise network will resume growth in Ontario after a regulatory resolution.

why it matters

For investors, the report signals a shift from chasing revenue toward improving profitability. The positive adjusted operating income suggests costs are under control, but the next phase will depend on the outcome of the strategic review and on the franchise business getting back to growth.

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