A highly volatile stock can deliver big gains - or just as easily wipe out a portfolio if things go south.
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As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at beverages, alcohol, and tobacco stocks, starting with Tilray (NASDAQ:TLRY).
A number of stocks fell in the afternoon session after markets pulled back amid hotter-than-expected inflation data. The main concern for investors was the July Producer Price Index (PPI), a measure of wholesale inflation. The higher-than-expected reading suggests that companies could face squeezed profit margins due to rising costs. This also reduces the likelihood of the Federal Reserve cutting interest rates, which could further dampen economic activity. Compounding these inflation fears are multiple reports signaling a weakening consumer.
Tilray said it was evaluating several options, including, but not limited to, a stockholder-approved reverse stock split to address capital structure and maintain adherence to Nasdaq’s continued listing requirements.
Shares of cannabis company Tilray Brands (NASDAQ:TLRY)
jumped 18.9% in the morning session after it announced a strategic partnership to expand its medical cannabis presence in Italy, amid broader sector optimism fueled by potential U.S. regulatory changes. The company's subsidiary, FL Group, has partnered with Italian pharmaceutical firm Molteni to increase the availability of Tilray's medical cannabis extracts across Italy. Beyond this company-specific news, Tilray's stock is also benefiting from a powerful sector-wide rally. Investor optimism is surging due to speculation that the U.S. government may reclassify marijuana from a Schedule I to a Schedule III substance. This potential regulatory shift, reportedly being considered by the President, could provide significant tax relief for cannabis companies by easing restrictions under Internal Revenue Code Section 280E, which would directly improve profitability.
Cannabis company Tilray Brands (NASDAQ:TLRY) fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 2.3% year on year to $224.5 million. Its GAAP loss of $1.30 per share was significantly below analysts’ consensus estimates.
Tilray’s second quarter was met with a significant negative market reaction, as the company missed Wall Street’s revenue and earnings expectations. Management attributed the underperformance primarily to delayed export permits in Europe, ongoing consumer softness in its beverage division, and strategic SKU rationalization efforts across its portfolio. CEO Irwin Simon noted that “approximately $8 million” in international cannabis sales were delayed due to regulatory challenges in Portugal and Spain, and the beverage segment saw lower volumes as it completed integration of recent acquisitions. Strategic choices to prioritize higher-margin products and cost efficiencies also led to lower near-term sales, reflecting a cautious tone from leadership regarding current market conditions.
Cannabis stocks and ETFs skyrocketed after Trump hinted at reclassifying marijuana. Tilray surged 35% in 2 days. Other top performers included Trulieve, Tilray, Curaleaf, and Canopy Growth. This shift could ease federal regulations and improve the industry's growth potential.
A number of stocks jumped in the morning session after the release of a favorable Consumer Price Index (CPI) report, which showed inflation cooling more than anticipated. The July report from the Bureau of Labor Statistics indicated a year-over-year inflation rate of 2.7%, just below the 2.8% economists had forecast. This suggests that price pressures on consumers may be easing. Particularly beneficial for the sector was the news that the food index remained flat, with grocery prices even declining by 0.1% month-over-month. This development is seen as a positive for the profitability of food, beverage, and personal care companies, as lower input costs and increased consumer purchasing power could boost sales.
Shares of cannabis company Tilray Brands (NASDAQ:TLRY)
jumped 38.5% in the afternoon session after reports that President Donald Trump is considering reclassifying marijuana as a less dangerous drug, a move that could transform the cannabis industry's regulatory landscape.
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