Sales at Goodfood continue to decline

Before Montreal-based online grocery retailer Goodfood Market can hope for sales growth, it must first ensure that sales decline is contained.

Posted at 9:49

Richard Dufour

Richard Dufour
The press

Sales for the spring quarter fell 38% year over year to 67 million, below analysts’ forecast of 73 million.

Goodfood’s quarterly sales hit a record 108 million for the same period a year ago.

“Goodfood’s sales decline is the largest in a year to date and the fourth straight decline when comparing the company’s results to last quarter’s strong sales, which were boosted by pandemic-related health measures,” commented Stifel’s analyst Martin Landry /GMP.

“The path back to sales growth is unclear,” adds the expert.

A net loss of 21 million is recorded for the spring months. While that loss is stable compared to a year ago, it is still higher than the two million loss reported over the winter.

The adjusted operating loss of 11 million, on the other hand, is lower than the previous quarter’s figure of 13.6 million.

Goodfood CEO Jonathan Ferrari believes the company is positioned for a return to growth and profitability. He expects adjusted operating profit in the first half of fiscal 2023.

Desjardins Securities analyst Frédéric Tremblay believes the decline in the operating loss and the expectation of an operating profit are positives. “There is still work to be done, but initial progress in operational conversion and cost optimization is encouraging,” he said.

Active customers (those who have placed an order in the last three months) fell from 35,000 to 211,000 in the quarter. “The current inflationary context could be a factor as people move towards cheaper groceries,” says Martin Landry.

Goodfood shares fell 3% to $1.40 when markets opened in Toronto on Wednesday, hitting a 52-week low in the stock market. The stock has since Janah January is up about 90% from its peak of $13 reached in January last year.

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