GrowGeneration (GRWG) Oppenheimer's 24th Annual Virtual Consumer Growth and E-Commerce Conference summary

Business performance and industry trends

• Revenue grew from $1 million in 2014 to $422 million in 2021, but guidance for 2024 is $210 million, reflecting industry correction and stabilization.

• Q1 2024 saw the first positive same-store sales comps in 11 quarters, indicating signs of recovery.

• Private label products reached 23% of sales in Q1, the highest in company history, driven by consumer demand for cost-effective options.

• Geographic performance varied, with California and Michigan showing strength, while Oklahoma lagged.

• Store count reduced from nearly 70 to 46, focusing on efficiency and servicing more customers from fewer locations.

Strategic evolution and private label focus

• Shifted from aggressive expansion and M&A to a simpler, more efficient model emphasizing supply chain and technology.

• Private label products, especially soils and nutrients, are a key growth driver, with a target to reach 30% of sales by 2025.

• Private label margins are 10% higher for hard goods and 20%-40% higher for consumables compared to branded products.

• Innovation is driven by collaboration with cultivators, with over 350 active product trials.

• Building brands internally is preferred over acquisitions, though opportunistic purchases are considered.

Store footprint and distribution strategy

• Store rationalization cut $30 million in expenses, with further consolidation possible but no new stores planned for 2024.

• Distribution infrastructure includes 900,000 sq ft and two major centers, enabling a shift toward wholesale and distribution.

• Private label offerings are central to the distribution strategy, supporting sales through independent retailers.

• No longer prioritizing being first to enter new states; instead, leveraging supply chain to penetrate markets.