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

Executive Summary

• Goodfood reported Q1 FY2026 net sales of C$27.5 M, down 21% YoY, and a net loss of C$2.58 M, widening from the prior year’s C$1.69 M loss.
• Adjusted EBITDA turned positive at C$1.01 M but fell 38% YoY; adjusted EBITDA margin slipped to 3.7% (down from 4.7%).
• Cash and marketable securities declined to C$14.5 M, while total net debt rose to C$26.9 M, pushing the net‑debt‑to‑adjusted‑EBITDA ratio to 4.92×.

Key Details

• Operating cash flow: C$1.36 M (down from C$2.19 M YoY).
• Adjusted free cash flow: C$1.25 M (down from C$1.85 M YoY).
• Gross margin: 42.3% vs. 39.6% in Q1‑2025 (+2.7 p.p.).
• Selling, G&A expenses: C$10.85 M, down C$1.55 M YoY but as a % of sales rose to 39.4%.
• Net finance costs: C$2.08 M (up 45% YoY) due to lower fair‑value of marketable securities.
• Convertible debentures (liability component): C$41.37 M vs. C$45.68 M prior year.
• Cash & cash equivalents: C$11.79 M (down from C$21.26 M).
• Marketable securities: C$2.73 M (up from C$0.50 M).
• Total net debt: C$26.85 M, up C$2.9 M YoY; net‑debt/adjusted‑EBITDA = 4.92× vs. 2.59×.
• Revenue drivers: Decline in active customers offset by higher average order value; Heat & Eat and Genuine Tea add‑ons helped stabilize sequential revenue.
• Leadership: New leadership team focused on margin protection, cash generation, and disciplined capital allocation.
• Outlook: Management emphasizes continued cash‑flow focus, potential acquisitions (first acquisition – Genuine Tea completed late 2024), and expects seasonal headwinds in upcoming quarters.

Notable Quotes

“The first quarter marks a clear step in stabilizing the business… we delivered a 42.3% gross margin, positive adjusted EBITDA and $1.2 million of adjusted free cash flow.” – Selim Bassoul, Executive Chairman

“Our priorities are clear: protect margins, generate cash and allocate capital with discipline… we will remain highly selective on acquisitions that strengthen our platform.” – Selim Bassoul

Materiality Assessment: Material – Negative (significant decline in sales, widening loss, deteriorating debt metrics).