Toronto, Ontario–(Newsfile Corp. – July 5, 2022) – PesoRama Inc. (TSXV: WEIGHT) (“PesoRama” or “Company“), a Canadian company that operates dollar stores in Mexico under the JOi Canadian Stores brand, today announced its financial results for the three months ended April 30, 2022. (“Q1 2022“). All financial figures are in Canadian dollars unless otherwise noted:
Key financial and operational highlights
PesoRama continues to see growth in its stores and sales, with two key stores opening in the first quarter of 2022: Cuernavaca and Cuemanco.
Introduced multi-price points to increase product range and increase growth of new product categories across all departments.
A contract was concluded with a strategic partner in order to increase cost efficiency and the level of services in the supply chain and distribution logistics.
Sales increased 35% to $2,247,273 primarily due to the opening of seven new stores in the year ended January 31, 2022 (“Fiscal year 2022“) and increased volume in previously opened Company stores.
Adjusted EBITDA was ($1,312,684) compared to ($867,957), primarily driven by additional public company expenses and investments in personnel and infrastructure to support growth.
Adjusted gross margin was $938,721 or 41.8% compared to $761,757 or 45.9% primarily due to rising material and transportation costs as a result of the COVID-19 pandemic.
“We’re extremely proud of the business we’ve built and the brand awareness we’ve gained as the only true retailer in Mexico in such a short period of time,” said Rahim Bhaloo, founder and executive chairman of PesoRama. “The company accomplished a lot this past quarter, with our transition to a publicly traded company, the opening of two new stores, strategic supply chain partnerships and the introduction of more price points to improve product mix and value.”
“Strengthening our foundation is our focus for the near term,” said Erica Fattore, president and chief executive officer of PesoRama. “This includes increasing profitability in our existing stores, managing inventory levels, increasing store traffic and average tickets per visit, and optimizing the overall customer experience as we continue to add to our strong pipeline for future store locations. We are well capitalized to execute on our near-term priorities and we are actively exploring opportunities to further strengthen our balance sheet with capital that will enable us to maximize shareholder value while delivering on our growth plans.”
Outlook and growth
PesoRama’s precise growth-oriented business model addresses the gap between local bodegas and large retailers and has proven to be very successful as the Company continues toward its goal of opening 500 stores in the next 5 years. In 2022, PesoRama opened two new stores in Mexico: Cuernavaca and Cuemanco.
JOi Canadian Stores offers a truly unmatched value proposition in the Mexican market – discounted general merchandise and high quality everyday products at affordable prices that cater to a wide range of customer segments. By strategically targeting high-traffic, easily accessible locations near well-known major retailers with a complementary customer mix, the Company is able to attract customers who want convenience and consistency. The latest store opening, PesoRama’s first street location, has proven to be a huge success, with increased brand awareness and increased traffic. The company intends to continue adding this type of model in the next round of store builds. The company will continue to optimize efficiency in its stores, as well as build on its unparalleled customer experience and overall satisfaction.
Supply chain efficiency is a core competency for PesoRama. In April 2022, PesoRama entered into a strategic partnership with an established retail conglomerate allowing the company to leverage its economies of scale and service level. PesoRama does not rely on China as a supplier of goods, having recently diversified its partners from areas as diverse as South Asia and Europe. In addition, PesoRama has established a strong in-house team to manage the logistics, warehousing and distribution of its wide range of products. The company’s distribution center in Mexico is strategically located to optimize costs and delivery times.
As part of the trade maximization strategy, the Company has added various new brands and products to store shelves to better meet the needs and wants of customers. The company is also in the process of implementing its multi-price strategy to expand its product range, increasing new category growth across all departments (ie adding pots and pans to the kitchen department) to increase customer loyalty. PesoRama believes that this strategy will help to increase the average ticket per customer and traffic in its stores through a wider offer. The newly added prices are 30 and 35 pesos and the Company will try to test additional prices in the future.
This press release should be read in conjunction with the Company’s interim condensed consolidated financial statements for the three-month period ended April 30, 2022, which can be found on PesoRama’s issuer profile on SEDAR at www.sedar.com.
About PesoRama Inc.
PesoRama, operating under the JOi Canadian Stores brand, is a Mexican dollar retailer. PesoRama launched operations in 2019 in Mexico City and surrounding areas targeting high-density, high-traffic locations. PesoRama 20 stores offer a permanent selection of merchandise that includes items in the following categories: Household, Pet, Seasonal, Party, Health & Beauty, Snacks, Confectionery and more.
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Founder and Executive Chairman
President and Chief Executive Officer
There are measures included in this release that do not have a standardized meaning under International Financial Reporting Standards (IFRS) and therefore may not be comparable to similarly titled measures and metrics presented by other publicly traded companies. The Company includes these measures because it believes that certain investors use them as a means of evaluating financial performance. Adjusted gross margin, EBITDA and adjusted EBITDA are financial measures that do not have a standardized meaning under IFRS. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA refers to earnings before interest, taxes, depreciation, amortization, stock-based compensation, one-time transaction costs and financing costs. Adjusted gross margin is defined as gross profit plus distribution costs divided by sales.
We prepare and publish quarterly unaudited and annual audited financial statements prepared in accordance with IFRS. We also disclose and discuss certain non-GAAP (generally accepted accounting principles) financial information used to evaluate our performance in this and other earnings releases and investor conference calls to supplement the results provided in accordance with IFRS. We believe that current shareholders and potential investors in the Company use non-GAAP financial measures such as Adjusted Gross Margin, EBITDA and Adjusted EBITDA in making investment decisions about the Company and measuring its operating results.
Management believes that investors and financial analysts measure our business on the same basis, and we provide Adjusted Gross Margin, Operating Profit, EBITDA and Adjusted EBITDA as financial metrics to assist in this assessment and provide a higher level of transparency as we measure our own business.
Adjusted EBITDA is more fully defined and discussed, and a reconciliation to IFRS financial measures is provided in the Company’s Management’s Discussion and Analysis (“MD&A”) for the three-month period ended April 30, 2022.
This press release contains “forward-looking information” within the meaning of applicable securities laws, including, among other things, statements regarding the Company’s planned expansion, new store openings and expected future developments and other factors deemed appropriate. Although the Company believes that the expectations expressed in this forward-looking information are reasonable, undue reliance should not be placed on them as the Company can give no assurance that they will prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking information. Actual results and developments may differ materially from those anticipated in these statements, including due to changes in consumer behavior, general economic factors, the Company’s ability to execute its strategies, availability of capital and risk factors discussed in more detail in the “Factors risk” of the Company’s prospectus dated January 31, 2022 and filed under the Company’s profile at www.sedar.com. The statements in this press release were made as of the date of this release. PesoRama undertakes no obligation to comment on the analyses, expectations or statements of third parties regarding PesoRama, its securities or its financial or operating results (if applicable).
Neither the TSX Venture Exchange nor its regulation service provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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