Mercanto estimates $150,000 profit for Q2

Executive Summary

• Mercanto Holdings Inc. provided a forward-looking operational update and preliminary unaudited financial guidance for the second quarter of fiscal 2026 (ended Jan. 31, 2026), ahead of its formal earnings release.
• The company reported significant year-over-year growth in revenue and a transition from a net loss to a net profit, driven primarily by the late-Q2 launch of its vape cartridge portfolio in Quebec.
• Management highlighted that while initial sales were volatile due to the staggered launch timing and holiday season, inventory flow and ordering patterns have stabilized, with normalized demand exceeding initial expectations.

Key Details

• Revenue Guidance: $2.05 million to $2.2 million for Q2 2026, representing over 110% growth compared to $1,003,116 in Q2 2025.
• Net Profit/Loss Guidance: $150,000 to $190,000 net profit for Q2 2026, compared to a net loss of ($109,215) in Q2 2025.
• EBITDA Guidance: $220,000 to $270,000 for Q2 2026, compared to an EBITDA loss of ($96,038) in Q2 2025.
• Product Launch Dynamics: The Quebec vape cartridge category launched late in Q2 2026, with three vape cartridge SKUs and an approved battery introduced approximately one month into the quarter.
• Sales Performance: Initial sales were volatile due to the limited launch window, holiday season timing, and the novelty of the provincial product category. However, management reports that replenishment cycles have stabilized and normalized weekly ordering patterns are better than expected.
• Strategic Impact: Management views the successful entry into the vape category as pivotal for portfolio breadth, revenue diversification, and future growth, validating product-to-market fit in the Quebec market.

Notable Quotes

• "Given the novelty of the category, the staggered timing of the launch within the quarter and heightened holiday demand, initial sales activity was volatile and may not have been representative of normalized demand."
• "As replenishment cycles have begun to stabilize, management is observing better-than-expected consistency in weekly ordering patterns and is encouraged by the current level of normalized sales."
• "Management views the successful entry into the vape category as potentially pivotal for Mercanto, given its impact on portfolio breadth, revenue diversification and overall growth trajectory into the future."