Goodfood Reports First Quarter of 2026 Results with Net Sales of $28 million, Gross Profit of $12 million and Adjusted EBITDA¹ of $1 million

Core Viewpoint - Goodfood Market Corp. reported financial results for the first quarter of fiscal 2026, indicating a focus on stabilizing the business amidst challenging market conditions, achieving a gross margin of 42.3%, positive adjusted EBITDA, and adjusted free cash flow of $1.2 million [2][6]. Financial Performance - Net sales for the first quarter were $27.5 million, a decrease of 21% from $34.7 million in the same period last year [5]. - Gross profit was $11.6 million, down 15% from $13.7 million year-over-year, with a gross margin improvement of 2.7 percentage points [5][6]. - The company reported a net loss of $2.6 million, compared to a loss of $1.7 million in the previous year, with a basic and diluted loss per share of $0.03 [5][6]. Operational Insights - The company is focusing on tighter cost controls and improved execution, with a clear strategy to build a more resilient operating model [3][4]. - An operational review is underway to prioritize profitable demand and enhance capital deployment [4]. - The leadership transition is nearly complete, emphasizing the protection of margins and disciplined capital allocation [4]. Cash Flow and Capital Structure - Cash flows from operating activities were $1.4 million, with an adjusted free cash flow of $1.2 million for the quarter [6][10]. - The total net debt increased to $26.9 million, with a total net debt to adjusted EBITDA ratio of 4.92, up from 2.59 the previous year [11]. Strategic Outlook - Goodfood aims to generate consistent cash flows through meal solutions and is broadening its platform via acquisitions, with Genuine Tea being the first acquisition [13][15]. - The company is focused on enhancing product variety and stabilizing revenue through new offerings like Heat & Eat and Genuine Tea products [14][16]. - Future growth avenues will include selective acquisitions to strengthen the business and improve cost and margin structures [4][15]. Market Trends - The meal solutions category, particularly meal kits, is under pressure, and the company does not anticipate a near-term recovery [3]. - Seasonal trends affect net sales and expenses, with expectations of lower sales during winter holidays and summer seasons [17].