Goodfood reports Q3 loss as costs rise
Investors applauded record third-quarter revenue at Goodfood Market, sending shares higher in Wednesday’s trading even though the company swung to a loss compared with a profit a year earlier.
The loss was driven by dramatically increased spending by the make-at-home meal kits provider.
Goodfood, which also delivers grocery items, reported revenue of $107.8 million for the quarter that ended on May 31. That was up 24 per cent from the same quarter in 2020, an impressive accomplishment given that last year locked-down Canadians were ordering meal kits as never before. Revenue for the third quarter of fiscal 2020 soared by 74 per cent to $86.6 million.
Costs, however, also went up in the most recent quarter. Selling, general and administrative costs were up a startling 89 per cent to $36.8 million, enough to swamp revenue growth and leave the company with a loss of $2 million. The company ramped up spending on a new leased fulfillment centre in Ottawa, new grocery offerings and a mobile app.
A look at Goodfood’s shares makes it clear investors are wary about the company’s growth prospects as restaurants reopen around the country. The stock is down 31 per cent so far in 2021, and 45 per cent of its peak on Jan. 26 this year.
The company, however, said it is building for the future and is willing to sacrifice profitability in the near term to do so.
“The online grocery industry is among the fastest growing industries in the world,” it told investors on Wednesday, a day when its top-line performance perhaps bore that out.