Some slowdown in growth, but GMs starting to improve
Amid tailwinds from labour shortages and retailers looking to update prices more frequently due to the inflationary environment, the ESL market has been particularly strong over the recent 24 months - though with a slowdown in momentum more recently. During 2022 and into the beginning of 2023, Pricer saw strong growth, but with deteriorating gross margins due to elevated costs for electronic components and freight rates, exacerbated by FX headwinds. Although the 8% y-o-y sales growth in Q3 was lukewarm (mainly due to delayed deliveries with a major Canadian customer), the external headwinds on the gross margin have started to abate, which is why we saw sequential GM improvements (18%, up from 16% in Q2), and we expect this positive trajectory to continue in 2024e.
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