Goodfood: Reports Third Quarter 2022 Results

Montreal / CA. (gfc) Goodfood Market Corporation, a leading Canadian online grocery company, delivering fresh meal solutions and grocery items, announced financial results for the third quarter of Fiscal 2022, ended June 04, 2022.

«In our third quarter, we have demonstrated continued progress across our three key value-creating drivers. First, our focus to improve profitability is yielding substantial results as our gross margin surpassed 26 percent for the first time in a year, on its way to returning to our 30 percent historical average. This improvement, despite extraordinary inflationary pressures across all our input costs, along with strong cost discipline in our SG+A cost structure, have improved our Adjusted Ebitda by CAD 3 million this quarter compared to the second quarter, reaching an Adjusted Ebitda loss of CAD 10.6m, a significant improvement from our first post-Covid Adjusted Ebitda loss of CAD 17.7m in the fourth quarter of Fiscal 2021,» said Jonathan Ferrari, Chief Executive Officer of Goodfood.

«We also showed important growth in our other two key value-creating drivers, with on-demand active customers reaching 38,000 and our micro-fulfilment centre footprint standing at 9 facilities in operation. As we outlined in our second quarter disclosure, our path to profitability is expected to be driven by a return to back-to-school volumes in our weekly subscription offering and by reaching a certain level of scale in on-demand active customers and micro-fulfilment centres. The progress made this quarter on our on-demand strategy positions us very well on our path to profitability. In addition to scale, additional efficiencies in costs of goods sold and selling, general and administrative expenses are expected to provide the required leverage to achieve positive Adjusted Ebitda. Last quarter, we launched Project Blue Ocean, a series of identified initiatives which we have begun to put in place that are designed to yield cost efficiencies to return the company to a positive Adjusted Ebitda position in the first half of Fiscal 2023,» added Ferrari

«As of today, through pricing, operational simplification and SG+A reductions, Project Blue Ocean, which we launched during the third quarter, has contributed to gross margin and SG+A improvements and we expect further savings opportunities in the near-term. With the objective of simplifying our operations, we are undertaking a review of our asset base, seeking opportunities to optimize our facilities infrastructure beginning with the consolidation in late June of our breakfast facility in Montreal into our main production facility. In addition, in recent months, we have begun to significantly simplify our operations through key actions such as ingredient reduction in our ready-to-eat meals and curtailing grocery availability in weekly subscription to streamline our processes. Finally, earlier this month, we passed through a high single-digit percentage price increase, placing us at or slightly below our largest competitor’s pricing.»

«As we continue to execute on our three key value-creating drivers and Project Blue Ocean, we are building an optimized cost structure that, combined with a return to growth, will provide the Company with the financial flexibility required to return to positive Adjusted Ebitda and continue to execute on our on-demand strategy,» concluded Ferrari.