Tilray released its results for the first quarter of its fiscal year 2022, which ended August 31. The company's revenue increased by 250% compared to the first quarter of last year to $ 168 million. However, the figure was 3% less than our consensus due to the fact that the company still feels pressure on its business due to the Covid pandemic. However, according to the press release, in-store traffic is starting to grow markedly, which gives confidence in the short term. The management announced that it continues to implement the program to reduce costs and is already close to achieving the planned target. In annual terms, Tilray managed to save about $ 55 million from the planned $ 80 million.
We believe that with a diversified product portfolio (cannabis, distribution, US craft beer and hemp products), Tilray's total sales could approach $ 1 billion in its first year as a combined Tilray-Aphria company. The recovery in the legal cannabis market is slower than we predicted, so Tilray is experiencing temporary difficulties in building market share after peaking. Nevertheless, we expect an early stabilization of the business.
According to our estimates, the combined Tilray-Aphria company will rank first in the Canadian market in several business areas at once. Tilray-Aphria will also be the most profitable Canadian LP with EBITDA higher than its three closest competitors combined. In addition, the company expects to see synergies from the $ 81 million before tax merger in the first 18 months. Despite the short-term slowdown in performance, we highly appreciate the business outlook, therefore we maintain our target valuation for Tilray shares at $ 23.
Tilray, Inc. is a cannabis-lifestyle consumer packaged goods company, with operations in Canada, the U.S., Europe and Latin America. Following the company's merger with Aphria in May 2021, the company operates in four verticals markets: cannabis, distribution, beer and hemp-products. Within its core Canadian cannabis market, Tilray is the market share leader while its production platform supports over 20 brands in over 20 countries.