GrowGeneration swings to profit, but $2.6 million of tariff refunds did the lifting

GrowGeneration (GRWG), the Colorado supplier of nutrients, lighting and growing equipment to indoor and commercial growers, reported a third-quarter net profit of $0.2 million on Tuesday, against a $2.4 million loss a year earlier. In the same release it said it will close four to five more stores, withdrew its full-year Adjusted EBITDA guidance of $2 million to $3 million and narrowed its revenue outlook to $163 million to $165 million, from $162 million to $168 million. The stock closed at $1.51, down 3.8%, and was at about $1.48 after hours, according to Nasdaq data.

The number behind the headline

The company called the quarter a turnaround, with gross margin up 520 basis points to 32.4%. The earnings release on SEC EDGAR also says gross profit "included a $2.6 million reduction in cost of sales associated with IEEPA tariff refunds", the duties the Supreme Court struck down. Those refunds are a one-off recovery of costs booked in earlier periods.

Our arithmetic, from the release's rounded figures:

The release says the tariff costs were not excluded from EBITDA and Adjusted EBITDA when they were incurred, and that the refund is treated the same way, so it sits inside the $2.3 million. Without it, margin was roughly 0.6 points lower than a year ago, not 5.2 points higher. The real gains are lower costs: total operating expenses fell 7.1% to $14.6 million, and store operating expenses fell about 11.9%.

What else changed

• Sales fell. Net sales were $44.8 million against $47.3 million a year ago, which the company attributes to a smaller store base. It was up from $43.2 million in the second quarter.
• Proprietary brands grew. Sales of its own brands rose 19.3% to $14.4 million, 40.6% of Cultivation and Gardening revenue, up from 31.6%.
• Store count. It had 19 retail locations in 9 states at September 30 and closed four in the first nine months. Two of the new closures are already done. In its Form 8-K, the company said it cannot yet estimate restructuring charges (lease exits, severance) and will exclude them from non-GAAP measures. It expects the work to be substantially done by the end of the first quarter of 2027.
• Balance sheet. $41.8 million in cash and marketable securities and no debt. It bought back about 0.7 million shares at an average $1.46 during the quarter, with about $8.0 million left on the authorization.

Why the guidance withdrawal matters

Management said it is pulling the $2 million to $3 million EBITDA range because of "closure-related and restructuring costs and the timing of anticipated savings". The third quarter was its second straight quarter of positive Adjusted EBITDA, and its $2.3 million alone nearly reaches the bottom of that range. Withdrawing it means the fourth quarter is expected to carry costs the company will not yet size. Investors will look for the charge estimate in the 8-K amendment it has promised.

Who this touches

For independent growers and greenhouse operators who buy from GrowGen's local stores, fewer locations means longer trips for substrate, nutrients and lighting, and more reliance on its online and wholesale channels. The company says it is shifting toward commercial customers. For a supplier or landlord with a lease in a closing location, the timing of exits runs through the first quarter of 2027, per the filing.

The company scheduled an analyst call for 4:30 p.m. Eastern Tuesday. Related coverage: the Atlanta Fed survey of tariff refunds and Worthington's refund-assisted quarter.

Sources: GrowGeneration earnings release and Form 8-K filed Nov. 10, 2026 (SEC EDGAR); Nasdaq quote data as of Nov. 10, 2026; Seeking Alpha. Margin and EBITDA ex-refund figures are our calculations from rounded figures in the release. This is market information, not investment advice.