Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Goodfood (TSX:FOOD) Stock Sinks 31% After Earnings Loss

Stock MarketsNov 17, 2021 10:15
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Goodfood (TSX:FOOD) Stock Sinks 31% After Earnings Loss

Goodfood Market (TSX:FOOD) shares plummeted on Nov. 17 after the company announced earnings. While it managed to see a record increase in sales, its loss increased almost 500%, sending shares down over 30%.

Key points

  • Goodfood stock shares sunk after the company announced its loss increased almost 500% year over year.
  • Shares were down over 30% in early trading on Wednesday, Nov. 17.
  • Management backs up the loss for creating its fulfillment network and on-demand meal and grocery delivery service.

What happened? Goodfood stock had a lot of positivity during its earnings report, but it cannot be denied that the major problem was the loss from the meal-kit company. Net sales increased 33% year over year to $379.2 million — a record for annual net sales for the company. It remained in a “strong financial position” with $125.5 million in cash on its books, and it announced further expansion of its fulfillment network.

However, Goodfood stock also announced an enormous loss of $31.8 million compared to the same time in 2020. Last year that loss was at $5.3 million, an increase of 495% for this year. That came in at a loss of $0.45, an increase from the loss of $0.09 last year by 400%, and far more than the estimated loss of $0.06 by analysts.

Still, management chalked this up to its continued investments. The company continues to create a fulfillment network of 13 facilities across the country. This should both speed up delivery times and support online on-demand delivery for both meals and groceries.

What Goodfood stock management says The bottom line of the business is sales growth, and Chief Executive Officer Jonathan Ferrari (NYSE:RACE) believes this is what long-term investors should look forward to. Goodfood stock continues to be in its long-term growth strategy of creating a solid online, on-demand grocery and meal service. Soon, that could mean deliveries in less than an hour, soon to be launched in Toronto and Montreal.

“This year’s record annual net sales and gross profit have helped lay the foundation for the next phase of our growth and evolution, despite the headwinds faced in the fourth quarter, as easing COVID restrictions reduced consumer demand and appeared to magnify expected Q4 seasonality,” stated Ferrari. “We expect these headwinds to stabilize as the year progresses and the return to normalcy continues, with our newly launched one-hour on-demand delivery providing the key platform for growth.”

What’s next for Goodfood stock? What’s next is whether or not management can prove this long-term growth strategy will work. Investors may worry that Goodfood stock won’t see the growth they’ve become accustomed to with the pandemic easing. Consumers are venturing out, with vaccination rates down. So, this may mean fewer sales in the future.

However, just looking at the numbers this doesn’t seem to be the case. Goodfood stock continues to reach record sales, only hampered by its recent investments. The losses its accrued are therefore not based on the reduction of sales, but investment in its business. So, this is definitely something to consider when looking at Goodfood stock.

Goodfood stock is now down 62% year to date, reaching 52-week lows after this earnings announcement. That’s compared to a gain of 20% on the S&P/TSX Composite Index.

The post Goodfood (TSX:FOOD) Stock Sinks 31% After Earnings Loss appeared first on The Motley Fool Canada.

Fool contributor Amy Legate-Wolfe owns shares of Goodfood Market Corp. The Motley Fool recommends Goodfood Market Corp.

This Article Was First Published on The Motley Fool

Goodfood (TSX:FOOD) Stock Sinks 31% After Earnings Loss
 

Related Articles

Bakkt Jumps On Crypto Custody Deal With Nexo
Bakkt Jumps On Crypto Custody Deal With Nexo By Investing.com - Jan 19, 2022

By Sam Boughedda Investing.com — Digital asset platform Bakkt Holdings Inc (NYSE:BKKT) saw its shares jump 2.2% Wednesday after it announced a partnership with Nexo, a...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email