TORONTO, ON – July 5, 2022 – PesoRama Inc. (TSXV: PESO) (“PesoRama” or the “Company“), a Canadian company operating 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 experience growth in its stores and sales, with two key store openings in Q1 2022: Cuernavaca and Cuemanco.
- Introduced multi-price points to increase product assortment and increase growth of new product categories across all departments.
- Entered into an agreement with a strategic partner to leverage freight cost efficiencies and service levels in supply chain and distribution logistics.
- Sales increased by 35% to $2,247,273 primarily driven by the opening of seven new stores in the year ended January 31, 2022 (“Fiscal Year 2022”) and increased volume at the Company’s previously opened 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 margins were $938,721 or 41.8% compared to $761,757 or 45.9% due primarily to rising material and transportation costs as a result of the COVID-19 pandemic.
“We are extremely proud of the business we have built and the brand awareness we have gained as Mexico’s only true dollar store retailer in such a short period of time,” said Rahim Bhaloo, Founder and Executive Chairman of PesoRama. “The Company has achieved a lot over the past quarter, with our transition to a publicly-traded company, two new store openings, a strategic supply chain partnership, and the introduction of multi-price points to enhance product mix and value.”
“Solidifying our foundation is our focus for the near term,” said Erica Fattore, President & Chief Executive Officer of PesoRama. “This includes driving profitability in our existing stores, managing inventory levels, increasing store traffic and average ticket per visit, as well as 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 are actively exploring opportunities to further strengthen our balance sheet with capital that will allow us to maximize shareholder value as we deliver on our growth plans.”
Outlook and Growth
PesoRama’s precision growth-oriented business model addresses the gap between local bodegas and big box retailers and has proven highly successful as the Company continues toward its goal of opening 500 stores over the next 5 years. In 2022, PesoRama has 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 everyday high-quality staples at affordable prices that cater to a wide array of client segments. By strategically targeting high-traffic, easily accessible locations close to established major retailers with a complementary client mix, the Company is able to attract customers who desire convenience and consistency. The newest store opening, PesoRama’s first street front location, has proven to be a great success, with increased brand awareness and increased foot traffic. The Company intends to move forward with the addition of this type of model in the next round of store builds. The Company will continue to optimize efficiencies within its stores as well as building on its unmatched customer experience and overall satisfaction.
Supply chain efficiencies are 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 levels. PesoRama is not reliant on China as a supplier of goods, having recently diversified its partners from areas as diverse as South Asia and Europe. Additionally, PesoRama has established a strong in-house team to manage the logistics, warehousing, and distribution of its broad product assortment. The Company’s distribution center in Mexico is strategically located to optimize delivery cost and time.
As part of the store maximization strategy, the Company has added various new brands and products to store shelves to better serve customer needs and wants. The Company is also in the process of rolling out its multi-price point strategy to broaden product range, increasing the growth of new categories across all departments (i.e., adding pots and pans to the kitchen department) to enhance customer loyalty. PesoRama believes this strategy will help increase the average ticket per customer and traffic to its stores through a broader offering. The newly added price points are 30 and 35 pesos and the Company will look to test additional price points in the future.
This earnings news release should be read in conjunction with the Company’s interim condensed consolidated financial statements for the three-month period ending 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 value dollar store retailer. PesoRama launched operations in 2019 in Mexico City and the surrounding areas targeting high density, high traffic locations. PesoRama’s 20 stores offer consistent merchandise offerings which include items in the following categories: household goods, pet supplies, seasonal products, party supplies, health and beauty, snack food items, confectionery and more.
For further information please contact:
Founder & Executive Chairman
President & Chief Executive Officer
There are measures included in this news 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 certain investors use them as a means of assessing 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 expenses and financing costs. Adjusted gross margin is defined as gross profit plus distribution costs divided by sales.
We prepare and release 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 as a complement to 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 operational results.
Management believes that investors and financial analysts measure our business on the same basis, and we are providing the adjusted gross margin, operating profit, EBITDA, and adjusted EBITDA as financial metrics to assist in this evaluation and to provide a higher level of transparency into how we measure our own business.
Adjusted EBITDA is more fully defined and discussed, and reconciliation to IFRS financial measures is provided, in 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 that have been considered appropriate. While the Company believes that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements, including due to changes in consumer behaviour, general economic factors, the ability of the Company to execute its strategies, the availability of capital and the risk factors which are discussed in greater detail in the “Risk Factors” section of the Company’s prospectus dated January 31, 2022 and filed under the Company’s profile on www.sedar.com. The statements in this press release are made as of the date of this release. PesoRama undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of PesoRama, its securities, or its financial or operating results (as applicable).
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.