Maison Solutions Reports 115.6% Revenue Growth, Net Income Turnaround in Q2 2024

Maison Solutions Inc. reported significant financial growth for the three months ended July 31, 2024, with total revenues reaching $29.6 million, a substantial increase of 115.6% compared to $13.8 million in the same period of 2023. This growth was primarily driven by the acquisition of Lee Lee Oriental Supermart, which contributed approximately $18.2 million in revenue. However, existing stores experienced decreased sales, with notable declines from Maison Monterey Park, Maison San Gabriel, Maison Monrovia, and Maison El Monte.

Gross profit for the quarter was approximately $8.3 million, reflecting a 166.1% increase from $3.1 million year-over-year. The gross margin improved to 27.9%, up from 22.6% in the prior year. Operating income also saw a remarkable turnaround, reporting $1.6 million compared to a loss of $216,745 in the previous year. Net income attributable to Maison Solutions Inc. was $700,908, a significant recovery from a net loss of $104,939 in the same quarter of 2023.

The company’s total operating expenses increased to approximately $6.6 million, up from $3.3 million in the prior year, largely due to higher payroll and utility expenses associated with the Lee Lee acquisition. Interest expenses also rose to $183,387, compared to $46,566 in the previous year, reflecting the financial obligations from the acquisition.

As of July 31, 2024, Maison Solutions reported current assets of $12.6 million, an increase from $11.9 million as of April 30, 2024. However, the company faced challenges with a working capital deficit of approximately $15.8 million and a bank overdraft of $1.8 million, significantly up from $97,445 in the previous quarter. Total stockholders’ equity increased to $11.3 million from $10.7 million.

The company has been actively pursuing growth through acquisitions, including the recent purchase of Lee Lee for approximately $22.2 million, which included $7 million in cash and a secured promissory note of $15.2 million. Future plans involve expanding its supermarket footprint and enhancing marketing efforts, with an estimated investment of $35 million to $40 million required for new stores and warehouses.

Maison Solutions is also navigating various legal challenges, including class action lawsuits related to securities violations, which may impact its financial outlook. Despite these challenges, the company is focused on improving its operational efficiency and financial reporting, having identified material weaknesses in internal controls and initiating remediation efforts.