Goodfood Q1 Loss Widens; Shares Plunge

Shares of Goodfood Market Corp (TSE: FOOD) plunged more than 6% in early trading Tuesday after the company reported lower sales and a wider loss in the first quarter of 2022. 

Demand dropped over the period as pandemic-related restrictions were steadily lifted. Goodfood Market is a Canadian online grocery, home meal, and meal kit company based in Montreal, Quebec. 

Sales & Earnings 

Net sales came in at C$77.8 million for the quarter ended December 4, a decrease of 15% from C$91.4 million in the prior-year quarter.  

Meanwhile, Goodfood posted a net loss of C$21.6 million (-C$0.29 per share) in Q1 2022, compared to a loss of C$3.1 million (-C$0.05 per share) in Q1 2021.  

Adjusted EBITDA was C$14.6 million, compared to adjusted EBITDA of C$835,000 a year earlier.  

Goodfood Market said it expects rapid on-demand commercial delivery to act as a catalyst for growth. 

The company plans to expand its weekly orders and active customer base by adding greater geographic coverage and increasing its distribution network. 

CEO Commentary 

Goodfood CEO Jonathan Ferrari said, “With C$105 million of cash on hand and additional revolver availability, we have strong balance sheet flexibility to continue executing and implementing our long-term growth driver. During the quarter, we have made exciting progress on our 30-minute grocery and meal solution delivery strategy and initial on-demand results of our Toronto and Montreal facilities are exceeding expectations. With a net promoter score of over 80, growing customers’ baskets consistently above the C$65-mark, monthly cohort order retention rates above 110% and order frequencies exceeding 2.5 times per month, we are seeing our on-demand metrics outperforming many global quick commerce companies.” 

Wall Street’s Take 

Last week, RBC Capital analyst Paul Treiber kept a Hold rating on FOOD with a price target of C$4.50. This implies 31.2% upside potential.   

The rest of the Street has given a Moderate Buy rating on FOOD based on four Buys and four Holds. The average Goodfood market price target of C$7.47 implies 117.8% upside potential to current levels.  

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