Maison Solutions Inc. (MSS)·Q3 2024 Earnings Summary

Executive Summary

• Q3 FY2024 revenue was $13.60M, down 12.9% year over year and modestly below Q2, with gross margin of 23.4% improving sequentially versus Q2’s 22.7% but below prior-year’s 25.6%; EPS was -$0.03 versus $0.06 last year, driven by lower sales and the absence of last year’s $1.3M ERC benefit .
• Management emphasized ongoing store renovations and the planned opening of a 37,000 sq. ft. flagship in Rowland Heights later in 2024 as strategic growth drivers; El Monte renovation completion was targeted for March 2024, with software-driven store optimization highlighted .
• Liquidity strengthened: cash and equivalents rose to $9.41M at January 31, 2024 (from $8.60M at October 31, 2023 and $1.61M at July 31, 2023), supported by the October IPO and November private placement .
• No formal financial guidance was provided; competition (two new Asian supermarkets near San Gabriel), normalization post-COVID customer relief, and renovation-related disruption were cited as headwinds that pressured Q3 results .

What Went Well and What Went Wrong

What Went Well

• Sequential margin improvement: gross margin rose to 23.4% in Q3 from 22.7% in Q2, reflecting lower freight and cost controls; per management, “we continue to make considerable operational progress through store renovations, new store openings, and acquisitions” .
• Strategic footprint expansion: the Rowland Heights flagship (37,000 sq. ft.) remained on schedule for later 2024, positioned to be “one of the largest and most advanced Asian grocery supercenters in the state” .
• Strengthened balance sheet and cash: cash/equivalents increased to $9.41M by Jan 31, 2024, underpinned by ~$10M IPO proceeds and ~$5M private placement, enhancing financial flexibility for renovation and growth .

What Went Wrong

• Top-line pressure: Q3 revenue fell to $13.60M from $15.64M YoY on competition near San Gabriel, end of COVID relief programs, and temporary El Monte renovation impact .
• Operating deleverage: Q3 operating loss widened to $(0.31)M versus $(0.05)M YoY, driven by gross profit declines even as cost of revenues fell with reduced freight .
• Earnings reversal: net loss attributable to MSS was $(0.55)M (EPS -$0.03) versus net income $0.99M (EPS $0.06) a year ago, mainly due to non-repeat of ~$1.3M ERC recognized in prior-year Q3 .

Financial Results

Quarterly Performance vs Prior Periods

YoY Comparison (Q3 FY2024 vs Q3 FY2023)

Segment Breakdown (Revenue)

KPIs and Operating Expense Profile

Guidance Changes

Management did not issue quantitative guidance; commentary focused on renovations and the Rowland Heights opening timeline .

Earnings Call Themes & Trends

Note: No Q3 FY2024 earnings call transcript was found in our document corpus or via public transcript sources, suggesting no call or no published transcript. Analysis below references disclosures across Q1–Q3 filings/press releases.

Management Commentary

• “We continue to make considerable operational progress through store renovations, new store openings, and acquisitions of additional stores to efficiently grow our footprint.” — John Xu, President & CEO .
• “Our El Monte store…is on track to be completed later this month…leveraging our recently purchased software suite to drive revenues through optimization of store design, layout and shelf displays.” — John Xu .
• “We remain on schedule to open our flagship, 37,000 square-foot, store in Rowland Heights, California later this year, which we believe will become one of the largest and most advanced Asian grocery supercenters in the state.” — John Xu .
• Post-IPO operating cost and professional fee dynamics disclosed, with plans to expand both West and East Coast footprint using proceeds (Q1 MD&A) .

Q&A Highlights

No Q3 FY2024 earnings call transcript was located; therefore, no Q&A highlights or guidance clarifications are available from a call [earnings-call-transcript listing returned none].

Estimates Context

• Wall Street consensus estimates from S&P Global were unavailable for Q3 FY2024 due to retrieval limitations; as a result, we cannot compare actuals to SPGI consensus here (Values retrieved from S&P Global unavailable).
• Public automated coverage noted Q3 EPS of -$0.03 and revenue of $13.60M, consistent with company disclosures, but did not provide consensus benchmarks .

Key Takeaways for Investors

• Sequential margin improvement amid lower freight costs is a positive sign; continued execution on renovations and store optimization could support margins into FY2024 Q4/FY2025 .
• Near-term sales headwinds from competitive openings and renovation disruption remain the principal risk to top-line stabilization; watch San Gabriel performance and El Monte normalization post-renovation .
• Liquidity has markedly improved (cash $9.41M), supported by IPO/private placement, giving flexibility to execute store openings and acquisitions; monitor OpEx discipline as public-company costs persist .
• The Rowland Heights flagship opening later in 2024 is a potential catalyst for traffic, mix, and brand presence; timing/execution will be important for sentiment .
• Absence of formal guidance and limited sell-side coverage reduce near-term visibility; investors should track quarterly disclosures for margin trajectory and competitive impacts .
• YoY comps remain tough given non-repeat ERC benefit and prior-year margin levels; sequential progress, not YoY comparisons, may be the better lens near term .
• Focus positions: perishable mix softness and non-perishable steadiness across quarters suggest merchandising and pricing actions in perishables will be key to restoring revenue growth .