GrowGeneration Corp.GRWG
GrowGeneration Corp. Segments Disclosure
15. SEGMENTS
The Company has two operating segments, each its own reportable segment, based on its major lines of business: the Cultivation and Gardening segment, composed of the Company's hydroponic and organic gardening business; and the Storage Solutions segment, composed of the Company's benching, racking, and storage solutions business.
In addition to sales by operating segment, which represent the Company's principal lines of business, the chief operating decision maker ("CODM") evaluates the Company's operations by regularly reviewing sales by major product line, including proprietary brands, non-proprietary brands, and commercial fixtures, and by product type, including consumable and durable products. Profit measures are evaluated for each reportable segment based on income from operations with identifiable expenses allocated to each reporting unit from which the expense line item was derived.
The CODM compares actual results to prior year and current year budgeted income statements to identify areas for improvement and make capital allocation decisions. The CODM uses gross profit measures to evaluate pricing decisions and product mix, also reviewing proprietary brand versus non-proprietary brand sales to assess the Company’s progress with key performance initiatives. The Company's CODM is the chief executive officer.
Disaggregated revenue by segment is presented in the following tables:
| December 31, | |||||||||||||||||
| Net sales | 2024 | 2023 | 2022 | ||||||||||||||
| Cultivation and Gardening | |||||||||||||||||
| Proprietary brand sales | $ | 39,528 | $ | 36,473 | $ | 36,906 | |||||||||||
| Non-proprietary brand sales | 123,982 | 157,991 | 208,775 | ||||||||||||||
| Total Cultivation and Gardening | 163,510 | 194,464 | 245,681 | ||||||||||||||
| Storage Solutions | |||||||||||||||||
| Commercial fixture sales | 25,356 | 31,418 | 32,485 | ||||||||||||||
| Total Storage Solutions | 25,356 | 31,418 | 32,485 | ||||||||||||||
| Total | $ | 188,866 | $ | 225,882 | $ | 278,166 | |||||||||||
| December 31, | |||||||||||||||||
| Net sales | 2024 | 2023 | 2022 | ||||||||||||||
| Cultivation and Gardening | |||||||||||||||||
| Consumables | $ | 118,088 | $ | 139,431 | $ | 161,012 | |||||||||||
| Durables | 45,422 | 55,033 | 84,669 | ||||||||||||||
| Total Cultivation and Gardening | 163,510 | 194,464 | 245,681 | ||||||||||||||
| Storage Solutions | |||||||||||||||||
| Durables | 25,356 | 31,418 | 32,485 | ||||||||||||||
| Total Storage Solutions | 25,356 | 31,418 | 32,485 | ||||||||||||||
| Total | $ | 188,866 | $ | 225,882 | $ | 278,166 | |||||||||||
Selected disaggregated information by segment is presented in the following tables for the years ended:
| December 31, 2024 | |||||||||||||||||||||||
| Cultivation & Gardening | Storage Solutions | Corporate | Total | ||||||||||||||||||||
| Net sales | $ | 163,510 | $ | 25,356 | $ | — | $ | 188,866 | |||||||||||||||
| Cost of sales | 131,346 | 13,798 | — | 145,144 | |||||||||||||||||||
| Gross profit | 32,164 | 11,558 | — | 43,722 | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Store operations and other operational expenses: | |||||||||||||||||||||||
| Employee costs | 13,720 | 3,007 | — | 16,727 | |||||||||||||||||||
| Facilities | 12,850 | 1,270 | — | 14,120 | |||||||||||||||||||
| External service providers | 1,127 | 89 | — | 1,216 | |||||||||||||||||||
Other segment items (1) | 7,246 | 889 | — | 8,135 | |||||||||||||||||||
| Total store operations and other operational expenses | 34,943 | 5,255 | — | 40,198 | |||||||||||||||||||
| Other operating expenses | |||||||||||||||||||||||
| Selling, general, and administrative | — | — | 29,243 | 29,243 | |||||||||||||||||||
| Estimated credit losses | — | — | (58) | (58) | |||||||||||||||||||
| Depreciation and amortization | — | — | 19,436 | 19,436 | |||||||||||||||||||
| Impairment loss | — | — | 6,875 | 6,875 | |||||||||||||||||||
| Total operating expenses | 34,943 | 5,255 | 55,496 | 95,694 | |||||||||||||||||||
| (Loss) income from operations | (2,779) | 6,303 | (55,496) | (51,972) | |||||||||||||||||||
| Other income | — | — | 2,620 | 2,620 | |||||||||||||||||||
| Net (loss) income before taxes | $ | (2,779) | $ | 6,303 | $ | (52,876) | $ | (49,352) | |||||||||||||||
(1) Other segment items for each reportable segment include travel expenses, transaction fees, and other miscellaneous expenses. | |||||||||||||||||||||||
| December 31, 2023 | |||||||||||||||||||||||
| Cultivation & Gardening | Storage Solutions | Corporate | Total | ||||||||||||||||||||
| Net sales | $ | 194,464 | $ | 31,418 | $ | — | $ | 225,882 | |||||||||||||||
| Cost of sales | 147,060 | 17,564 | — | 164,624 | |||||||||||||||||||
| Gross profit | 47,404 | 13,854 | — | 61,258 | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Store operations and other operational expenses: | |||||||||||||||||||||||
| Employee costs | 18,208 | 2,962 | — | 21,170 | |||||||||||||||||||
| Facilities | 14,145 | 1,057 | — | 15,202 | |||||||||||||||||||
| External service providers | 1,290 | 61 | — | 1,351 | |||||||||||||||||||
Other segment items (1) | 9,496 | 863 | — | 10,359 | |||||||||||||||||||
| Total store operations and other operational expenses | 43,139 | 4,943 | — | 48,082 | |||||||||||||||||||
| Other operating expenses | |||||||||||||||||||||||
| Selling, general, and administrative | — | — | 29,799 | 29,799 | |||||||||||||||||||
| Estimated credit losses | — | — | 955 | 955 | |||||||||||||||||||
| Depreciation and amortization | — | — | 16,607 | 16,607 | |||||||||||||||||||
| Impairment loss | — | — | 15,659 | 15,659 | |||||||||||||||||||
| Total operating expenses | 43,139 | 4,943 | 63,020 | 111,102 | |||||||||||||||||||
| Income (loss) from operations | 4,265 | 8,911 | (63,020) | (49,844) | |||||||||||||||||||
| Other income | — | — | 3,380 | 3,380 | |||||||||||||||||||
| Net income (loss) before taxes | $ | 4,265 | $ | 8,911 | $ | (59,640) | $ | (46,464) | |||||||||||||||
(1) Other segment items for each reportable segment include marketing costs, travel expenses, transaction fees, and other miscellaneous expenses. | |||||||||||||||||||||||
| December 31, 2022 | |||||||||||||||||||||||
| Cultivation & Gardening | Storage Solutions | Corporate | Total | ||||||||||||||||||||
| Net sales | $ | 245,681 | $ | 32,485 | $ | — | $ | 278,166 | |||||||||||||||
| Cost of sales | 186,844 | 21,059 | — | 207,903 | |||||||||||||||||||
| Gross profit | 58,837 | 11,426 | — | 70,263 | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Store operations and other operational expenses: | |||||||||||||||||||||||
| Employee costs | 23,578 | 2,526 | — | 26,104 | |||||||||||||||||||
| Facilities | 14,750 | 755 | — | 15,505 | |||||||||||||||||||
| External service providers | 1,374 | 76 | — | 1,450 | |||||||||||||||||||
Other segment items (1) | 10,660 | 961 | — | 11,621 | |||||||||||||||||||
| Total store operations and other operational expenses | 50,362 | 4,318 | — | 54,680 | |||||||||||||||||||
| Other operating expenses | |||||||||||||||||||||||
| Selling, general, and administrative | — | — | 36,758 | 36,758 | |||||||||||||||||||
| Estimated credit losses | — | — | 1,737 | 1,737 | |||||||||||||||||||
| Depreciation and amortization | — | — | 17,132 | 17,132 | |||||||||||||||||||
| Impairment loss | — | — | 127,831 | 127,831 | |||||||||||||||||||
| Total operating expenses | 50,362 | 4,318 | 183,458 | 238,138 | |||||||||||||||||||
| Income (loss) from operations | 8,475 | 7,108 | (183,458) | (167,875) | |||||||||||||||||||
| Other income | — | — | 1,243 | 1,243 | |||||||||||||||||||
| Net income (loss) before taxes | $ | 8,475 | $ | 7,108 | $ | (182,215) | $ | (166,632) | |||||||||||||||
(1) Other segment items for each reportable segment include marketing costs, travel expenses, transaction fees, and other miscellaneous expenses. | |||||||||||||||||||||||
The Company does not evaluate segments by assets or capital expenditures as it is not practical and does not inform any of its decision making processes. The CODM neither reviews nor requests this information.
Customer and supplier concentrations
No customer accounted for more than 10% of the Company's sales for the years ended December 31, 2024, 2023, and 2022. As of December 31, 2024, the loss of any supplier or vendor would not have a severe impact on the Company's business.
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About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.