Cost pressures and strategic review cloud My Food Bag’s growth momentum
My Food Bag Group Limited reported a steady 5% revenue increase for FY26, with net profit rising 5.3% amid improved customer retention and expanded product offerings. The company declared a fully imputed final dividend and initiated a strategic review of its ownership and capital structure.
- Revenue rises 5% to $170.2 million
- Net profit after tax up 5.3% to $6.7 million
- Net debt reduced by $5.1 million to $1.9 million
- Final dividend declared at 1.15 cents per share
- Strategic review of ownership and capital structure underway
Steady growth despite inflationary pressures
My Food Bag Group Limited (NZX:MFB) delivered a solid financial performance for the year ended 31 March 2026, posting a 5% increase in revenue to $170.2 million and a 5.3% rise in net profit after tax to $6.7 million. The company’s second half revenue growth accelerated to 6.2%, signalling a strengthening demand trajectory despite ongoing economic headwinds.
CEO Mark Winter attributed the growth to enhanced customer engagement, with the company benefiting from higher retention rates and increased order frequency. Active customers nudged up slightly to 57,100, while average order value climbed 2.8% to $133.71, supported by modest price adjustments and a shift towards larger meal options.
Margin resilience and operational efficiency
Gross margin remained broadly stable at 49.0%, marginally below FY25’s 49.3% but above the five-year average of 48.5%. Supply chain optimisation and pricing initiatives helped offset inflationary pressures, particularly on protein and produce costs, which rose 6.4% and 7.3% respectively year on year.
Contribution margin held steady at 21.2%, reflecting disciplined cost control and productivity gains across labour, packaging, and distribution. The company’s partnership with NZ Post enabled delivery network efficiencies, while innovative packaging solutions like Dynamic Box and Ice reduced waste and costs.
Expanding beyond subscriptions with the My Food Bag Shop
FY26 marked the first full year of the My Food Bag Shop, a flexible on-demand channel offering gifting bundles, Ready Made meals, and one-off purchases without subscription commitments. This initiative broadened the company’s reach to new customer segments, including corporate clients, and contributed to incremental revenue growth.
The Shop’s product range expanded to include fresh cakes and flowers, alongside Ready Made soups and desserts. Delivery lead times improved, with same-day options introduced in Auckland, enhancing convenience and customer experience.
Health-led innovation and brand strength
My Food Bag strengthened its health credentials with new dietary solutions tailored to evolving customer needs. Notable launches included a Diabetes Plan in partnership with Diabetes New Zealand, a GLP-1 support menu for consumers on weight loss medications, and preferences for High Protein and Gut Friendly options.
The company’s flagship brand remains New Zealand’s highest rated meal kit, supported by ambassador Nadia Lim and partnerships such as Auckland FC. Bargain Box continues to hold the value segment with targeted campaigns and sponsorships, while Fresh Start captures the wellness-focused market.
Balance sheet improvement and dividend increase
Strong free cash flow of $8.5 million enabled My Food Bag to reduce net debt by $5.1 million to $1.9 million, significantly strengthening its financial position. This robust cash generation underpins the Board’s decision to declare a fully imputed final dividend of 1.15 cents per share, bringing total dividends for FY26 to 1.90 cents per share and delivering a yield of approximately 10.1% based on the current share price.
Capital expenditure remained modest at $2.9 million, focusing on growth initiatives and operational improvements, including a new integrated warehouse and inventory management system rolled out across Auckland and Christchurch.
Strategic review signals potential change ahead
In a notable development, the Board has initiated a strategic review of My Food Bag’s ownership, capital structure, and strategic options, engaging Cameron Partners as financial adviser. The process is in preliminary stages, and there is no certainty that any transaction will materialise. The company committed to keeping shareholders informed as appropriate.
Early trading in FY27 remains encouraging, with revenue up 5.1% in the first seven weeks despite emerging cost pressures from fuel supply disruptions and rising ingredient prices. Management is actively mitigating these through supply chain efficiencies and measured pricing adjustments.
My Food Bag’s diverse brand portfolio, operational discipline, and expanding product range position it well to navigate the challenging economic environment while pursuing growth opportunities in New Zealand’s evolving online food market.
Bottom Line?
My Food Bag’s FY26 results show steady growth and improved financial health, but rising costs and a strategic review inject uncertainty into its near-term outlook.
Questions in the middle?
- How will the strategic review impact My Food Bag’s ownership and capital structure in the coming months?
- Can the company sustain margin resilience amid escalating distribution and ingredient cost pressures?
- What role will the My Food Bag Shop and corporate partnerships play in driving future growth?
