Goodfood Market Corp. Celebrates 10th Anniversary with Strong Financial Performance
2024-01-17
Goodfood Market Corp., a leading online grocery company in Canada, recently held its Q1 2024 Earnings Call on January 16, 2024. The call was attended by key executives including Jonathan Ferrari (CEO), Neil Cuggy (President & COO), and Ross Aouameur (CFO). The purpose of the call was to discuss the company's financial performance and provide an opportunity for financial analysts to ask questions.
During the call, it was revealed that Goodfood Market Corp. was celebrating its 10th anniversary as a company in fiscal year 2024. The company expressed its satisfaction with its financial performance in the first quarter, with an adjusted EBITDA of $1.5 million, representing a growth of 8.5 percentage points compared to the previous year. The company attributed this growth to stronger order rates, larger baskets, and improved profitability.
Goodfood Market Corp. has been focused on enhancing its customer value proposition by expanding recipe customization options and launching smart bundles for various meal occasions. The company has also improved the digital experience for customers by adding recipe tags and creating simple categories for easier browsing. These initiatives have resulted in an increase in quarterly active customers, reaching 124,000 in the first quarter.
The company's commitment to profitable growth has been evident through its disciplined approach and focus on delivering growing cash flows. Goodfood Market Corp. has delivered four consecutive quarters of positive adjusted EBITDA and has seen a 380 basis point improvement in gross margin compared to the same quarter last year. The company achieved $1.5 million in adjusted EBITDA this quarter, with factors such as increased profitability, timing of invoices and payables, and lower capital investment contributing to the improvement in cash flows.
Goodfood Market Corp. recognizes the current trend of home cooking becoming even more popular, especially in the challenging economic climate. The company has been addressing customer feedback by broadening its assortment of healthy recipes, offering customization options, and partnering with brand ambassadors such as Montreal Canadiens Captain, Nick Suzuki, and Pro-Hockey Olympic Medalist, Sarah Nurse.
In terms of pricing and value, Goodfood Market Corp. offers meals at an average price of $10.99 per serving. The company also sells four-serving Family style recipes on the two serving plans to provide value to customers and increase the average basket size. Goodfood Market Corp. brings local flavors to its customers through curated partnerships with some of the best restaurants in Canada, offering unique and delicious options. The company also prioritizes planet-friendly options by reducing food waste, using a farm-to-table supply chain, offsetting carbon emissions on deliveries, and introducing packaging innovation to reduce plastic waste.
The company's efforts to reduce customer acquisition costs have been successful through driving down acquisition costs, spreading incentives over multiple boxes, and improving the digital experience. Goodfood Market Corp. has seen an increase in reactivated customers by providing a great offboarding experience and focusing on reengagement and reactivation of canceled customers. This has resulted in faster payback and profitability, with the average order value for new customers being well north of $100.
Goodfood Market Corp. positioned its service as a restaurant quality meal with a farm-to-table supply chain, offering great value compared to restaurants. The company recognized the macroeconomic headwind of customers focusing on maximizing the value they were getting. However, Goodfood Market Corp. compared its offering to expensive restaurant options and takeout, highlighting the cost savings compared to services like Uber Eats or SkipTheDishes delivery.
In terms of cash flow and capital allocation, Goodfood Market Corp. used a decent share of its cash flow for debt repayment. The company aimed to generate consistent positive cash flows and was considering future debt repayments and other potential capital allocation decisions. The credit facility gave the company access to more cash and the ability to make capital allocation decisions based on returns and growth opportunities.
Overall, Goodfood Market Corp. demonstrated strong financial performance, a commitment to profitable growth, and a focus on providing value to customers through innovative meal options and a seamless digital experience. The company's efforts to reduce customer acquisition costs and reactivate customers were successful, contributing to its positive cash flow generation. With its 10th anniversary milestone and continued dedication to customer satisfaction, Goodfood Market Corp. was well-positioned for future success in the online grocery market.