Before Montreal-based online grocery retailer Goodfood Market can hope for sales growth, it must first curb its sales decline.

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 high of 108 million in the same period a year ago.

“Goodfood’s sales decline is the largest in a year to date and the fourth consecutive 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 way back to sales growth is unclear,” adds the expert.

A net loss of 21 million is recorded for the spring months. While this loss is stable compared to a year ago, it is still higher than the 2 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 co-founder and CEO Jonathan Ferrari believes the company is positioned for a return to growth and profitability. He expects an adjusted operating result in the first half of the 2023 financial year.

This goal is considered “aggressive” by Martin Landry. “This implies a significant recovery at a time when the macroeconomic outlook is deteriorating. »

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

Active customers (those who have placed an order in the last three months) fell by 35,000 to 211,000 in the quarter. That’s a drop of almost 15%. “This is the second largest decline in the company’s history. This is worrying,” stresses Martin Landry.

In his opinion, the current inflationary context could be a factor as people adjust their behavior and turn to ever more cheaper food.

He also suggests that the decline in the number of active customers could be explained by a more disciplined customer acquisition strategy combined with the slowdown in demand for ready meals, which are considered “premium” products.

Goodfood shares fell 1 cent on Wednesday to close at $1.45 on the Toronto Stock Exchange. The stock has since Janah January and nearly 90% since the $13 top in January last year.

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