Maison Solutions Swings to $1.66M Loss Amid Revenue Dip, Store Closure

TL;DR

Maison Solutions is bleeding cash and closing stores; **stay away until they prove they can turn a profit.**

AI Summary

Maison Solutions Inc. reported a significant decline in financial performance for the three months ended July 31, 2025, with revenue decreasing by 3.6% to $27,165,134 from $28,178,091 in the prior year. The company swung to a net loss of $1,656,651, a stark contrast to the net income of $617,826 reported for the same period in 2024. This downturn was primarily driven by a substantial increase in interest expense, net, which surged from $179,056 to $652,409, and a significant investment loss of $848,493 compared to $206,803 in 2024. Additionally, net loss from discontinued operations more than doubled to $825,499 from $447,505. The company strategically closed its Maison El Monte store in June 2025 to improve profitability and support sustainable growth, which contributed to a loss from disposal of assets of $489,380. Total assets decreased by 5.2% from $77,362,889 to $73,339,754, while total liabilities decreased by 3.6% from $65,722,860 to $63,356,376. Cash on hand increased to $1,070,802 from $775,360.

Why It Matters

Maison Solutions' shift from profit to a substantial net loss of $1.66 million, coupled with a 3.6% revenue decline, signals significant operational and financial challenges for investors. The closure of the Maison El Monte store, while strategic, indicates a need for aggressive restructuring to regain profitability in a competitive specialty grocery market. Increased interest expenses and investment losses highlight potential vulnerabilities in its capital structure and investment strategy, which could impact future growth and shareholder value. Competitors in the Asian grocery segment may capitalize on Maison's struggles, potentially eroding market share if the company cannot quickly reverse its negative trends.

Risk Assessment

Risk Level: high — The company reported a net loss of $1,656,651 for the three months ended July 31, 2025, a significant deterioration from a net income of $617,826 in the prior year. This is compounded by a substantial increase in interest expense to $652,409 and an investment loss of $848,493, indicating financial strain and potential liquidity concerns despite management's belief in sufficient cash flow for the next 12 months.

Analyst Insight

Investors should exercise extreme caution and consider divesting, given the sharp decline in net income, increased losses from discontinued operations, and rising interest expenses. Monitor future filings closely for signs of successful strategic restructuring or improved profitability before considering any new investment.

Financial Highlights

debt To Equity

6.35

revenue

$27.17M

total Assets

$73.34M

total Debt

$40.24M

net Income

$(1.66M)

eps

$(0.08)

cash Position

$1.07M

revenue Growth

-3.6%

Key Numbers

• $27.17M — Revenue (decreased by 3.6% from $28.18M year-over-year)
• $(1.66M) — Net income (loss) (swung from $617,826 net income in 2024 to a net loss in 2025)
• $(0.08) — Basic EPS (decreased from $0.04 in 2024)
• $652,409 — Interest expense, net (increased significantly from $179,056 in 2024)
• $848,493 — Investment loss (increased from $206,803 in 2024)
• $825,499 — Net loss from discontinued operations (more than doubled from $447,505 in 2024)
• $489,380 — Loss from disposal of assets (due to store closure in June 2025)
• $1,070,802 — Cash (increased from $775,360 at April 30, 2025)
• $73.34M — Total Assets (decreased from $77.36M at April 30, 2025)
• $63.36M — Total Liabilities (decreased from $65.72M at April 30, 2025)

Key Players & Entities

• Maison Solutions Inc. (company) — registrant
• The Nasdaq Stock Market LLC (regulator) — exchange for Class A Common Stock
• Maison El Monte (company) — store closed in June 2025
• AZLL LLC (company) — wholly-owned subsidiary incorporated in Arizona
• Lee Lee Oriental Supermart, Inc (company) — acquired by AZLL LLC for $22.2 million
• Good Fortune Supermarket San Gabriel, LP (company) — 91% equity interest purchased by Maison Solutions
• Good Fortune Supermarket of Monrovia, LP (company) — 85.25% equity interest purchased by Maison Solutions
• Super HK of El Monte, Inc. (company) — 91.67% equity interest purchased by Maison Solutions
• GF Supermarket of MP, Inc. (company) — 100% equity interest purchased by Maison Solutions
• Federal Deposit Insurance Corporation (regulator) — insures bank deposits up to $250,000

FAQ

Risk Factors

• Store Closure Impact [medium — operational]: The closure of the Maison El Monte store in June 2025 resulted in a loss from disposal of assets of $489,380. This strategic decision, aimed at improving profitability and supporting sustainable growth, also contributed to the increase in net loss from discontinued operations, which more than doubled to $825,499 from $447,505 in the prior year.
• Increased Interest Expense [high — financial]: Interest expense, net, significantly increased from $179,056 in the prior year period to $652,409 for the three months ended July 31, 2025. This substantial rise in financing costs is a primary driver of the company's swing to a net loss.
• Investment Losses [medium — financial]: The company experienced a significant increase in investment losses, reporting $848,493 for the period compared to $206,803 in the prior year. This volatility in investment performance negatively impacted overall profitability.
• Deteriorating Profitability [high — financial]: Maison Solutions Inc. reported a net loss of $1,656,651 for the three months ended July 31, 2025, a sharp reversal from a net income of $617,826 in the same period last year. This downturn is exacerbated by rising operating costs and investment setbacks.
• Asset and Liability Reduction [medium — financial]: Total assets decreased by 5.2% to $73,339,754 from $77,362,889, and total liabilities decreased by 3.6% to $63,356,376 from $65,722,860. While a reduction in liabilities is generally positive, the overall decline in asset base alongside revenue decrease warrants attention.

Industry Context

Maison Solutions Inc. operates in the specialty grocery retail sector, focusing on Asian food and merchandise for U.S. consumers, particularly within Asian-American communities. The industry is characterized by increasing competition from both large supermarket chains and smaller ethnic grocers, as well as evolving consumer preferences for diverse food offerings and convenient shopping experiences.

Regulatory Implications

As a retail business, Maison Solutions Inc. is subject to various regulations including food safety standards, labor laws, and environmental regulations. Compliance with these regulations is crucial to avoid penalties and maintain operational integrity. The company's recent store closure and financial performance may also attract scrutiny from regulatory bodies regarding its operational and financial stability.

What Investors Should Do

1. Monitor cost management strategies.
2. Evaluate the impact of discontinued operations.
3. Assess revenue generation and market penetration.
4. Analyze the company's debt structure and liquidity.

Key Dates

• 2025-06-01: Maison El Monte Store Closure — Strategic decision to improve profitability and support sustainable growth, resulting in a $489,380 loss from disposal of assets and contributing to increased net loss from discontinued operations.
• 2025-07-31: End of Third Quarter — Reporting period for the 10-Q, showing a significant decline in revenue and a swing to a net loss, driven by increased interest expenses and investment losses.
• 2024-04-08: Acquisition of Lee Lee Oriental Supermart, Inc. — Significant acquisition for $22.2 million, comprising $7.0 million cash and a $15.2 million senior secured promissory note, expanding the company's footprint in Arizona.

Glossary

Discontinued Operations

A component of a business that the reporting entity has disposed of or classified as held for sale, and that represents a separate major line of business or geographical area of operations. (The net loss from discontinued operations more than doubled to $825,499, significantly impacting the overall financial results.)

Accumulated Deficit

The cumulative net losses of a company that have not been offset by net income or other gains. (The accumulated deficit increased to $(3,189,756) from $(1,648,223), reflecting the company's recent net losses.)

Investment under equity method

An accounting method used to report investments in which the investor has the ability to exercise significant influence over the investee's operating and financial policies. (The company reported a $848,493 investment loss, compared to $206,803 in the prior year, indicating a negative performance in its equity method investments.)

Operating lease right-of-use assets

Assets recognized by a lessee under IFRS 16 or ASC 842 for the right to use an underlying asset for the lease term. (These assets represent a significant portion of non-current assets, with a balance of $35,181,175 as of July 31, 2025.)

Year-Over-Year Comparison

Compared to the prior year's comparable period, Maison Solutions Inc. has experienced a significant downturn. Revenue decreased by 3.6% to $27.17 million, and the company swung from a net income of $617,826 to a net loss of $1.66 million. This deterioration is primarily driven by a substantial increase in interest expense (from $179,056 to $652,409) and higher investment losses ($848,493 vs. $206,803). Additionally, net loss from discontinued operations more than doubled, and a loss from asset disposal was recorded due to a store closure.

Key Financial Figures

• $0.0001 — which registered Class A Common Stock, $0.0001 par value per share MSS The Nasdaq Stoc

Filing Documents

• ea0257793-10q_maison.htm (10-Q) — 1019KB
• ea025779301ex31-1_maison.htm (EX-31.1) — 13KB
• ea025779301ex31-2_maison.htm (EX-31.2) — 14KB
• ea025779301ex32-1_maison.htm (EX-32.1) — 6KB
• ea025779301ex32-2_maison.htm (EX-32.2) — 5KB
• 0001213900-25-090145.txt ( ) — 8411KB
• mss-20250731.xsd (EX-101.SCH) — 80KB
• mss-20250731_cal.xml (EX-101.CAL) — 85KB
• mss-20250731_def.xml (EX-101.DEF) — 444KB
• mss-20250731_lab.xml (EX-101.LAB) — 739KB
• mss-20250731_pre.xml (EX-101.PRE) — 456KB
• ea0257793-10q_maison_htm.xml (XML) — 973KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION 1 Item 1. Unaudited Financial Statements. 1 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations. 35 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk. 50 Item 4.

Controls and Procedures

Controls and Procedures. 50

– OTHER INFORMATION

PART II – OTHER INFORMATION 52 Item 1. Legal Proceedings. 52 Item 1A. Risk Factors. 52 Item 2. Unregistered Sales of Equity Securities. 52 Item 3. Defaults Upon Senior Securities. 52 Item 4. Mine Safety Disclosures. 52 Item 5. Other Information. 52 Item 6. Exhibits. 52

- FINANCIAL INFORMATION

PART I- FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. MAISON SOLUTIONS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of July 31, 2025 (Unaudited) As of April 30, 2025 ASSETS CURRENT ASSETS Cash $ 1,070,802 $ 775,360 Accounts receivable 2,342,699 2,658,524 Accounts receivable - related parties 518,289 472,907 Inventories, net 5,890,473 5,324,268 Prepayments 2,640,046 2,423,684 Other receivables and other current assets 734,644 694,943 Other receivables - related parties 138,995 128,995 Total current assets 13,335,948 12,478,681 NON-CURRENT ASSETS Property and equipment, net 1,566,072 1,646,056 Intangible assets, net 7,280,037 7,419,812 Security deposits 856,008 856,008 Investment under cost method 75,000 75,000 Investment under cost method - related parties 162,665 162,665 Investment under equity method - 848,493 Operating lease right-of-use assets, net 35,181,175 35,693,340 Goodwill 14,882,849 14,882,849 Total non-current assets 60,003,806 61,584,223 Assets from discontinued operations - 3,299,985 TOTAL ASSETS $ 73,339,754 $ 77,362,889 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Bank overdraft $ 1,440,200 $ 1,446,647 Accounts payable 8,480,452 7,986,255 Accounts payable - related parties 568,969 536,373 Accrued expenses and other payables 2,003,203 1,708,304 Other payables - related parties 512,824 512,824 Income tax payable 1,065,488 661,408 Contract liabilities 675,428 701,929 Operating lease liabilities, current 3,425,836 3,403,852 Loan payable, current 65,247 62,212 Notes payable, current 4,882,060 4,887,094 Total current liabilities 23,119,707 21,906,898 NON-CURRENT LIABILITIES Long-term loan payable 2,536,990 2,553,838 Security deposit from sub-tenants 130,028 131,228 Operating lease liabilities, non-current 34,756,278 35,180,573 Notes payable, non-current - 754,966 Convertible note payable 1,018,670 58

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS JULY 31, 2025 (UNAUDITED) AND APRIL 30, 2025 1. Organization Maison Solutions Inc. ("Maison", the "Company", and formerly known as "Maison International Inc.") was founded on July 24, 2019 as an Illinois corporation with its principal place of business in California. In September 2021, the Company was redomiciled in the State of Delaware as a corporation registered under the laws of the State of Delaware. Immediately upon formation, the Company acquired three retail Asian supermarkets with two brands (Good Fortune and Hong Kong Supermarkets) in Los Angeles, California and rebranded them as "HK Good Fortune Supermarkets." Upon completion of these acquisitions, these entities became controlled subsidiaries of the Company (hereafter collectively referred to as "Maison Group"). In July 2019, the Company purchased 91 % of the equity interests in Good Fortune Supermarket San Gabriel, LP ("Maison San Gabriel") and 85.25 % of the equity interests in Good Fortune Supermarket of Monrovia, LP ("Maison Monrovia"), each of which owns a Good Fortune Supermarket. In October 2019, the Company purchased 91.67 % of the equity interests in Super HK of El Monte, Inc. ("Maison El Monte"), which owns a Hong Kong Supermarket. The Company shut down the Maison El Monte store in June 2025. The strategic decision to close Maison El Monte store is part of the Company's ongoing commitment to improve its profitability and support sustainable growth On June 30, 2022, the Company purchased 100 % equity interest in GF Supermarket of MP, Inc. ("Maison Monterey Park"), the legal entity holding a supermarket in Monterey Park. On November 3, 2023, the Company incorporated a wholly-owned subsidiary AZLL LLC ("AZLL") in Arizona. On April 8, 2024, AZLL closed an acquisition transaction and purchased 100 % of the equity interests in Lee Lee Oriental Supermart, Inc ("Lee Lee") for an aggregate purchase price of approximately $ 22.2 million, consisting of: (i) $ 7.0 million

View Full Filing

View this 10-Q filing on SEC EDGAR