(Montreal) The Goodfood market share lost more than 26% on Wednesday, after the Montreal company admitted that the relaxation of sanitary measures had hampered its growth this summer. The ready-to-cook food specialist hopes that the online grocery store will give its business a boost.
The summer season is generally a slower period for society. The easing of sanitary measures in Canada has exacerbated the phenomenon, explained the co-founder and CEO of Goodfood, Jonathan Ferrari, during a conference call to discuss the results of the fourth quarter of its fiscal 2021.
Its sales fell 5% to $ 79 million for the quarter ended Aug. 31. Mr. Ferrari stressed that revenues remained “significantly higher” than those recorded before the pandemic, which stood at $ 56 million in the fourth quarter of 2019. “It shows the resilience of the business model while there was a huge latent demand for outdoor activities, ”he says.
The argument did not convince investors. The stock was down $ 1.90, or 26.39%, to $ 5.30 when the Toronto Stock Exchange closed.
Before the results were released, analysts polled by Refinitiv were expecting an average revenue of $ 91 million. Luke Hannan of Canaccord Genuity believes fourth quarter results are “significantly” below expectations.
At the end of the quarter, the company said it had 298,000 active subscribers. A figure “well below” the forecast of 308,000 subscribers formulated by Mr. Hannan. Wholesale sales per subscriber, at $ 284, are also lower than the $ 310 he had anticipated.
“The easing of sanitary measures has allowed customers to eat more meals outside their home than what is typically observed during the previous fourth quarters,” the financial analyst said in a note. Active subscribers therefore ordered less often, while others decided not to place any orders. ”
Mr. Ferrari wanted to be reassuring during the phone call mentioning that the activities had rebounded since the trough of the months of July and August. He suggested, however, that with the easing of health measures and better weather in September and October, we would have to wait until the quarter covering the months of December, January and February, before returning to a more vigorous growth rate.
The forecast sets the stage for tougher days, Hannan believes. “Adding in the costs of supply chain disruptions, which will drag margins, we believe fiscal 2022 could be difficult for Goodfood. ”
Online grocery
The co-founder spent much of the conference call discussing his plans in the online grocery store, dangling a “sizable” potential market. He believes that 20% of the total $ 140 billion Canadian grocery market will migrate to fast delivery services.
“It’s easier for a customer to place an order online that will be delivered in less than an hour,” he says. It’s faster than driving to the grocery store, grabbing what you need, and coming home. ”
The company takes its first steps in delivery in less than an hour. This service is already available in Toronto. It will be offered in Montreal from November 22. The company has also offered same-day delivery to Vancouver since September.
Goodfood offers a variety of 1,000 products that its customers can put in their grocery cart, up from 970 in July. It aims to have nearly 4,000 in the medium term.
Frédéric Tremblay, of Desjardins Capital Markets, admits that the quarter has been disappointing, but he takes a positive view of the projects of the Montreal company. “We continue to love the potential that Goodfood has to build on its strengths in boxed lunches and profit from e-commerce. ”