What's Next for Tilray Brands After Posting Record Q2 Revenues?

Tilray Brands TLRY delivered net revenues of $217.5 million in the second quarter of fiscal 2026, a quarterly record driven by strong results in the company’s international operations. On a year-over-year basis, revenues were up 3%. The company’s Distribution business was the lead contributor, up 26% year over year to $85.3 million, based on the increasing focus on competitive pricing, the prioritization of high-margin SKUs and favorable foreign exchange impacts.

Following the temporary effect from the timing of import and export permits in the fiscal first quarter, the international cannabis business recorded a 36% increase in the second quarter. With international cannabis growth accelerating, Tilray Brands decided to scale back shipments into the Canadian wholesale market and redeploy that supply, along with new growth into the higher-margin international cannabis markets, through the rest of fiscal 2026. Overall, management is optimistic that the Distribution business will complement and strengthen the international cannabis segment as both continue to develop parallelly.

Tilray Brands’ Beverage business faced pressure from category-wide headwinds in the craft beer segment, as well as from the Project 420 portfolio optimization efforts, including SKU rationalization and margin-focused initiatives continuing to impact revenues. The company expects spring retailer product resets to help offset industry trends, improving brand visibility and aligning product mix with consumer preferences. The changes are likely to support Beverage revenues and gross margins in the fiscal fourth quarter.

Wellness net revenues were flat in the second quarter, supported by value-added innovation and continued growth in Hi-Ball and the Ingredient Channel. The gains were offset by challenges in the club retail channel, which the company is addressing through targeted initiatives.

TLRY’s Peer Updates

Cronos Group CRON is set to acquire all the outstanding shares of CanAdelaar B.V. — the largest cannabis company operating within the Netherlands adult-use cannabis pilot program. According to CRON, the acquisition is a financially compelling and highly strategic transaction that will establish a strategic footprint in Europe and enable the company to leverage its investments in borderless products. Cronos will acquire CanAdelaar for up-front consideration of $67.0 million^, with a cash earnout of 0.5X of CanAdelaar’s normalized EBITDA in 2026 and 2027.

Canopy Growth CGC has entered into a series of transactions to recapitalize its balance sheet and extend the maturity dates of all outstanding indebtedness to January 2031 at the earliest. At the conclusion of these Transactions, Canopy Growth is expected to have cash on hand of approximately C$425 million, providing additional flexibility to support its long-term priorities.

The Zacks Rundown for TLRY

In the past six months, Tilray Brands shares have surged 58.4% against the industry’s 6.5% fall.

In terms of valuation, TLRY is trading at a forward 12-month Price-to-Sales (P/S) of 1.18X, higher than its median but below the 3.05X industry average.

Take a look at how TLRY’s earnings estimates have been moving over the past 90 days.

TLRY stock currently carries a Zacks Rank #5 (Strong Sell).  

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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