Happy Belly Food Group Inc., a leader in acquiring and scaling emerging food brands across Canada recently announced its unaudited financial results and corporate update for the fiscal quarter ended March 31 2025, indicating the company’s 12th consecutive record quarter.
“In Q1 2025, Happy Belly Food Group marked its 12th consecutive record quarter of growth and reported its first quarter of positive net income from operations-signaling a pivotal cornerstone in our evolution,” said said Sean Black, Chief Executive Officer.
“This achievement underscores our continued progress toward becoming Canada’s premier acquirer and scaler of emerging food brands, while delivering meaningful value to our shareholders. We doubled our system sales, driving a 101% increase versus the same quarter last year. We successfully added 8 restaurant locations in Q1 through our continued focus on organic growth and accretive acquisitions.”
“I would like to personally congratulate all brand leaders, franchisees, team members and cross functional teams for an amazing start to fiscal 2025. The team continues to execute on our aggressive growth and strategic plans, which is leading to yet another positive step forward and significant growth during Q1 2025. System sales reached $11M (+101%), and total revenues of $4M (+95%) both doubled versus the same quarter last year,” said Gary Fung, Chief Financial Officer.
“Adjusted EBITDA increased 690%, while achieving positive cash flow before changes in non-cash working capital, and our first quarter positive net income from operations. Another key milestone achieved by Happy Belly Food Group.”
As at the end of Q1 2025, Happy Belly had 50 operating restaurants, up 32 or 178% versus the same quarter last year.
“I am very proud of the continued momentum that we have achieved in the business and with our financial results; we doubled our system sales and achieved the first quarter of positive net income from operations. These strong results are a testament to the team-oriented culture we have built at Happy Belly. Our management team and brand partners are working together to support our franchisees as we accelerate national expansion. With a clear focus on growth throughout 2025-2026, we believe our best chapters are still to come,” said Black.
Q1 2025 Financial Highlights
- System wide sales across Quick Service Restaurants (QSR) totalled $10.76M in the first quarter of fiscal 2025, up 101% versus the same quarter last year (2024 – $5.36M). The increase is attributed to organic baseline restaurant growth, alongside increased restaurant count, which reached 50 operating restaurants at the end of Q1 2025, up 178% versus 18 in the prior year. Total restaurant count includes the one acquisition during Q1 2025 (Smile Tiger Coffee Roasters; closed January 27, 2025).
- Total operating revenues, vendor rebates and interest income totalled $3.67M in fiscal 2024, up 95% versus the same quarter last year (2024 – $1.88M). Year-over-year growth was driven by continued sales growth in both the QSR and Consumer Product Goods (CPG) segments, multiple business acquisitions in the past twelve months, and new net restaurants (6 openings and 1 acquisition during Q1 2025).
- Total product sales totalled $3.08M in the first quarter of 2025, up 101% versus the same quarter last year (2024 – $1.53M). In addition, royalties and franchise fee revenues reached $0.39M during the quarter, up 139% from the prior year (2024 – $0.16M), which was driven by an increase in royalties collected from 37 franchised restaurants in the system.
- Adjusted EBITDA reached $0.23M or 6.4% in the first quarter of fiscal 2025, up 696% versus the same quarter last year (2024 – $0.03M or 1.5%). During the first quarter of fiscal 2025, net income from operations was net income positive $0.01M versus a loss of ($0.11M) in the prior year.
- Net working capital remains healthy at $3.74M as of March 31, 2025 (2024 – $0.80M). Total cash and cash equivalents were $3.60M as of March 31, 2025. One non-brokered private placement was completed on January 9, 2025 for $0.50M. Furthermore, cash flows before non-cash working capital was positive $0.10M in Q1 2025 versus negative ($0.09M) in the same quarter last year.
Happy Belly continued to make accretive cash and equity investments during the first quarter of fiscal 2025 by acquiring Smile Tiger Coffee Roasters on January 27 (1 restaurant location in Kitchener Waterloo).
Happy Belly added eight new restaurants during Q1 2025. The Heal Lifestyle brand opened five new locations. Lettuce Love Cafe and Yolks Breakfast Inc. each opened 1 location. One location was through the acquisition of Smile Tiger Coffee Roasters.
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