ORAGIN Foods Inc. (TSX-V:OG, OTCQX:OGGFF) has said its first-quarter results were impacted by significant renovations at one of the food company’s older retail store locations, which are expected to bring long-term benefits through improved customer experience and operational efficiencies.
Sales in the quarter ended April 30, 2022, fell to $5.7 million from $7.0 million in the same period last year, with net losses narrowing to $650,278 from $907,013.
The company, which changed its name from Organic Garage to Oragin Food in February this year, said sales were “significantly impacted” by Organic Garage's renovation to one of its older retail store locations as well as changes to government COVID-19 lockdown policies.
The impact of the renovations on net losses was offset by a reduction in store wages and benefits, professional fees, and costs savings related to the phasing out of warehouse operations.
"We achieved several operational goals during the quarter, including a significant renovation to one of our locations,” said Matt Lurie, chief executive officer of Oragin in a statement.
READ: Oragin Foods named one of Canada’s 'Future 50' Fastest-Growing Sustainable Companies
“The impact of the renovations was felt through our reported results; however, we expect that the short-term negative impacts will be offset by the long-term expectations for the location, including enhanced customer experience and operational efficiencies.
“Consistent branding and unified offerings across all our locations is a focus for the company with our existing locations as we plan for future store expansion. The company now has the majority of its locations with consistent award-winning branding and services, and the decision to engage in the renovation during this time was part of our long-term planning.”
Turning to Oragin's Future of Cheese business, the CEO said the consumer packaged goods (CPG) division continues to actively engage and evaluate select M&A opportunities to grow its portfolio and bottom line.
Commenting on the outlook, Lurie said Oragin expects fiscal improvements for the associated areas of its operations that faced non-recurring expenses last year.
“Management continues to focus on incremental operating expense reduction while at the same time maintaining and improving our product and service offering at each of our locations,” he explained.
“We acknowledge the challenges facing the business in regard to in-store sales and are working diligently to ensure that we are navigating the macroeconomic environment that is weighing heavily on businesses across the retail spectrum with strategy and purpose. We are excited for the go-forward path of Oragin and both of our divisions continue to show opportunity for growth."
Oragin is a Canadian multipronged food company, where new and innovative food and beverage brands are developed, acquired, grown and commercialized through a CPG division.
The company also houses a retail division, which owns and operates one of Canada's leading natural and organic food retailers, Organic Garage.
Contact the author at jon.hopkins@proactiveinvestors.com