Goodfood Swings to Loss in Q4; Shares Plunge

Shares of Goodfood Market Corp (FOOD) plunged more than 30% in early trading Friday after the company reported lower sales and a loss in the fourth quarter of 2021.

The effects of seasonality and reopenings weighed on sales. 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$79.4 million for the quarter ended August 31, a decrease of 5% from C$83.7 billion in the prior-year quarter.

Goodfood posted a net loss of C$22.1 million (C$0.30 per share) in Q4 2021, compared to a profit of C$1.2 million (C$0.02 per share) in Q4 2020.

For the fiscal year ended August 31, net loss was C$31.8 million (C$0.45 per share), compared to C$5.3 million (C$0.09 per share) in 2020. Net sales increased 33% to C$379.2 million. (See Insiders’ Hot Stocks on TipRanks)

CEO Commentary

Goodfood CEO Jonathan Ferrari said, “Supported by our improved technology backbone, the growing breadth of our selection and speed of delivery, reaching more than 30% of the Canadian population via same-day and one-hour or less delivery, position Goodfood in a leadership role in the expected rapid digitalization of the online grocery industry in Canada.

“This year’s record annual net sales and gross profit have helped lay the foundation for the next phase of our growth and evolution, despite the headwinds faced in the fourth quarter, as easing COVID restrictions reduced consumer demand and appeared to magnify expected Q4 seasonality.”

Wall Street’s Take

Two days ago, Raymond James analyst Michael Glen maintained a Buy rating on FOOD with a price target of C$12.50. This implies 152% upside potential.

The rest of the Street has given a Strong Buy rating on FOOD based on three Buys. The average Goodfood Market price target of C$13 implies 161.6% upside potential to current levels.

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