Fourth Quarter of 2024
- Net revenues were
$221.0 million - Results from operating activities were
$0.5 million - Net earnings were
$0.0 million
Fiscal 2024
- Net revenues were
$794.7 million - Results from operating activities were
$22.9 million - Net earnings were
$14.8 million
"We are pleased with the results for the fourth quarter of 2024 which capped off a year that saw significant headwinds for the retail industry with high inflation and high interest rates negatively impacting consumer shopping behaviour", said
(in millions of dollars, | For the fourth quarter of | For fiscal | |||||
2024 | 2023 | Change | 2024 | 2023 | Change | ||
Net revenues2 | 221.0 | 212.9 | 3.8 % | 794.7 | 803.3 | (1.1) % | |
Gross profit | 114.9 | 109.5 | 4.9 % | 431.0 | 451.4 | (4.5) % | |
Gross profit % | 52.0 % | 51.4 % | 60 bps | 54.2 % | 56.2 % | (200) bps | |
Selling, distribution and | 114.4 | 113.9 | 0.4 % | 408.1 | 403.1 | 1.2 % | |
Net earnings | 0.0 | 27.5 | (100.0) % | 14.8 | 77.7 | (81.0) % | |
Adjusted EBITDA1 | 1.7 | (3.7) | n/a | 29.2 | 57.0 | (48.8) % | |
Adjusted ROA1 | 0.5 | (6.3) | n/a | 22.0 | 45.7 | (51.9) % | |
1 This is a Non-GAAP Financial Measure. See "Non-GAAP Financial Measures & Supplementary Financial Measures" for reconciliations of these measures. |
2 For the fourth quarter of 2023 and fiscal 2023, shipping revenues of |
Net revenues for the fourth quarter of 2024, which includes an additional week of net revenue of
Gross profit for the fourth quarter of 2024 increased
Adjusted results from operating activities ("Adjusted ROA") for the fourth quarter of 2024 was
The Company had net earnings of nil for the fourth quarter of 2024 (
Adjusted EBITDA for the fourth quarter of 2024 was
Net revenues for the fiscal 2024 decreased by
Gross profit for fiscal 2024 decreased
Adjusted ROA for fiscal 2024 was
Net earnings for fiscal 2024 was
Adjusted EBITDA for fiscal 2024 was
This press announcement makes reference to certain non-GAAP measures. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. They are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for the Company's analysis of its financial information reported under IFRS.
This press announcement discusses the following non-GAAP financial measures: adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), and adjusted results from operating activities ("Adjusted ROA"). This press announcement also indicates Adjusted EBITDA as a percentage of net revenues and is considered a non-GAAP financial ratio. Net revenues represent the sale of merchandise less discounts and returns ("net sales"), and includes shipping fees charged to customers on e-commerce orders. The intent of presenting Adjusted EBITDA and Adjusted ROA is to provide additional useful information to investors and analysts. Adjusted EBITDA is currently defined as net earnings before income tax expense/recovery, interest income, interest expense, loss on foreign currency translation differences reclassified to net earnings, pension curtailment gain, depreciation, amortization, net impairment of non-financial assets, adjusted for the impact of certain items, including a deduction of interest expense and depreciation relating to leases accounted for under IFRS 16, Leases, Federal subsidies and restructuring recoveries/costs. Management believes that Adjusted EBITDA is an important indicator of the Company's ability to generate liquidity through operating cash flow to fund working capital needs and fund capital expenditures and uses this metric for this purpose. Management believes that Adjusted EBITDA as a percentage of net revenues indicates how much liquidity is generated for each dollar of net revenues. The exclusion of interest income and expenses, other than interest expense related to lease liabilities as explained hereafter, eliminates the impact on earnings derived from non-operational activities. The exclusion of depreciation, amortization and net impairment charges, other than depreciation related to right-of-use assets as explained hereafter, eliminates the non-cash impact, and the exclusion of restructuring recoveries /costs, Federal subsidies, loss on foreign currency translation differences reclassified to net earnings and pension curtailment gain presents the results of the on-going business. Under IFRS 16, Leases, the characteristics of some leases result in lease payments being recognized in net earnings in the period in which the performance or use occurs while other leases are recorded as right-of-use assets with a corresponding lease liability recognized, which results in depreciation of those assets and interest expense from those liabilities. Management is presenting its Adjusted EBITDA to reflect the payments of its store and equipment lease obligations on a consistent basis. As such, the initial add-back of depreciation of right-of-use assets and interest on lease obligations are removed from the calculation of Adjusted EDITDA, as this better reflects the operational cash flow impact of its leases.
Adjusted ROA is defined as results from operating activities excluding Federal subsidies, restructuring recoveries/costs and pension curtailment gain. Management believes that Adjusted ROA provides a more relevant indicator in assessing current operational performance. The exclusion of restructuring recoveries /costs, pension curtailment gain and Federal subsidies presents the on-going operational performance of the business.
The tables below provide a reconciliation of net earnings to Adjusted EBITDA and results from operating activities to Adjusted ROA:
For the fourth quarter of | Year to date fiscal | |||
2024 | 2023 | 2024 | 2023 | |
Net earnings | $ 0.0 | $ 27.5 | $ 14.8 | $ 77.7 |
Depreciation, amortization and net impairment | 3.9 | 3.9 | 14.2 | 15.6 |
Depreciation on right-of-use assets | 9.9 | 7.9 | 34.3 | 28.9 |
Interest expense on lease liabilities | 2.4 | 1.3 | 7.6 | 4.9 |
Interest income | (1.9) | (1.5) | (5.2) | (2.0) |
Interest expense on revolving credit facility | - | - | - | 0.4 |
Income tax (recovery) expense | (0.3) | (31.7) | 5.3 | (32.1) |
Loss on foreign currency translation | - | - | 1.0 | - |
Pension curtailment gain | - | - | (0.9) | - |
Rent impact from IFRS 16, Leases1 | (12.3) | (9.2) | (41.9) | (33.8) |
Federal subsidies | - | - | - | (1.2) |
Restructuring costs, net | - | (1.9) | - | (1.4) |
Adjusted EBITDA | $ 1.7 | $ (3.7) | $ 29.2 | $ 57.0 |
Adjusted EBITDA as % of Net Revenues | 0.8 % | (1.7) % | 3.7 % | 7.1 % |
1 Rent Impact from IFRS 16, Leases is comprised as follows; |
For the fourth quarter of | Year to date fiscal | |||
2024 | 2023 | 2024 | 2023 | |
Depreciation on right-of-use assets | $ 9.9 | $ 7.9 | $ 34.3 | $ 28.9 |
Interest expense on lease liabilities | 2.4 | 1.3 | 7.6 | 4.9 |
Rent impact from IFRS 16, Leases | $ 12.3 | $ 9.2 | $ 41.9 | $ 33.8 |
For the fourth quarter of | Year to date fiscal | |||
2024 | 2023 | 2024 | 2023 | |
Results from operating activities | $ 0.5 | $ (4.4) | $ 22.9 | $ 48.3 |
Pension curtailment gain | - | - | (0.9) | - |
Federal subsidies | - | - | - | (1.2) |
Restructuring costs, net | - | (1.9) | - | (1.4) |
Adjusted ROA | $ 0.5 | $ (6.3) | $ 22.0 | $ 45.7 |
The Company uses a key performance indicator ("KPI"), comparable sales, to assess store performance and sales growth. The Company engages in an omnichannel approach in connecting with its customers by appealing to their shopping habits through either online or store channels. This approach allows customers to shop online for home delivery or to pick up in store, purchase in any of our store locations or ship to home from another store when the products are unavailable in a particular store. Due to customer cross-channel behavior, the Company reports a single comparable sales metric, inclusive of store and e-commerce channels. Comparable sales are defined as net sales generated by stores that have been continuously open during both of the periods being compared and include e-commerce net sales. The comparable sales metric compares the same calendar days for each period. Although this KPI is expressed as a ratio, it is a supplementary financial measure that does not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures used by other companies. Management uses comparable sales in evaluating the performance of stores and online net sales and considers it useful in helping to determine what portion of new net sales has come from sales growth and what portion can be attributed to the opening of new stores. Comparable sales is a measure widely used amongst retailers and is considered useful information for both investors and analysts. Comparable sales should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS.
Forward-Looking Statements
All of the statements contained herein, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond the Company's control, including statements on the Company's financial position and operations, and are based on several assumptions which give rise to the possibility that actual results could differ materially from the Company's expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. Consequently, the Company cannot guarantee that any forward-looking statement will materialize, or if any of them do, what benefits the Company will derive from them. Forward-looking statements are provided in this press announcement for the purpose of giving information about management's current expectations and plans as of the date of this press announcement, and allowing investors and others to get a better understanding of the Company's operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose. Forward-looking statements are based upon the Company's current estimates, beliefs and assumptions, which are based on management's perception of historical trends, current conditions and currently expected future developments, as well as other factors it believes, are appropriate in the circumstances.
This press announcement contains forward-looking statements about the Company's objectives, plans, goals, expectations, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects, opportunities and legal and regulatory matters. Specific forward-looking statements in this press announcement include, but are not limited to, statements with respect to the Company's belief in its strategies and its brands and their capacity to generate long-term profitable growth, future liquidity, planned capital expenditures, amount of pension plan contributions, status and impact of systems implementation, the ability of the Company to successfully implement its strategic initiatives and cost reduction and productivity improvement initiatives as well as the impact of such initiatives. These specific forward-looking statements are contained throughout the Company's Management Discussion & Analysis ("MD&A") including those listed in the "Operating and Financial Risk Management" section of the MD&A. Forward-looking statements are typically identified by words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "strive", "will", "may" and "should" and similar expressions, as they relate to the Company and its management.
Numerous risks and uncertainties could cause the Company's actual results to differ materially from those expressed, implied or projected in the forward-looking statements. Please refer to the "Forward-Looking Statements" section of the Company's MD&A for the fourth quarter of 2024.
This is not an exhaustive list of the factors that may affect the Company's forward-looking statements. Other risks and uncertainties not presently known to the Company or that the Company presently believes are not material could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time. The reader should not place undue reliance on any forward-looking statements included herein. These statements speak only as of the date made and the Company is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, except to the extent required under applicable securities law.
The Company's complete financial statements including notes and Management's Discussion and Analysis for fiscal 2024 are available online at www.sedarplus.ca.
The Company is a leading women's specialty apparel retailer with retail outlets throughout
Neither
President and Chief Executive Officer
Telephone: (514) 384-1140
Corporate Website: www.reitmanscanadalimited.com
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (in thousands of Canadian dollars except per share amounts)
| ||||||
For the 14 weeks | For the 13 weeks January 28, 2023(1) | For the 53 weeks | For the 52 weeks January 28, 2023(1) | |||
Net revenues | ||||||
Cost of goods sold | 106,072 | 103,401 | 363,684 | 351,979 | ||
Gross profit | 114,912 | 109,489 | 431,004 | 451,294 | ||
Selling and distribution expenses | 99,728 | 100,793 | 357,772 | 353,244 | ||
Administrative expenses | 14,680 | 14,933 | 50,307 | 51,190 | ||
Restructuring | - | (1,860) | - | (1,380) | ||
Results from operating activities | 504 | (4,377) | 22,925 | 48,240 | ||
Finance income | 1,872 | 1,562 | 5,820 | 2,713 | ||
Finance costs | (2,628) | (1,384) | (8,606) | (5,384) | ||
(Loss) earnings before income taxes | (252) | (4,199) | 20,139 | 45,569 | ||
Income tax recovery (expense) | 239 | 31,653 | (5,324) | 32,098 | ||
Net (loss) earnings | $ (13) | $ 27,454 | $ 14,815 | $ 77,667 | ||
Earnings per share: | ||||||
Basic | $ 0.00 | $ 0.56 | $ 0.30 | $ 1.59 | ||
Diluted | 0.00 | 0.56 | 0.30 | 1.59 |
(1) For 13 and 52 weeks ended |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands of Canadian dollars)
| ||||||||
For the 14 weeks | For the 13 weeks | For the 53 weeks | For the 52 weeks | |||||
Net (loss) earnings | $ (13) | $ 27,454 | $ 14,815 | $ 77,667 | ||||
Other comprehensive (loss) income | ||||||||
Items that are or may be reclassified subsequently to | ||||||||
Cash flow hedges (net of tax of |
(1,869) | - | 851 | - | ||||
Loss on foreign currency translation differences |
- | - | 1,044 | - | ||||
Foreign currency translation differences |
- | 97 | - | (191) | ||||
Items that will not be reclassified to net earnings: | ||||||||
Net actuarial (loss) gain on defined benefit plan |
(462) | (1,248) | 260 | (1,054) | ||||
Total other comprehensive (loss) income |
(2,331) | (1,151) | 2,155 | (1,245) | ||||
Total comprehensive (loss) income |
$ (2,344) | $ 26,303 | $ 16,970 | $ 76,422 |
CONSOLIDATED BALANCE SHEETS As at (Unaudited) (in thousands of Canadian dollars) | |||
2024 | 2023 | ||
ASSETS | |||
CURRENT ASSETS | |||
Cash | $ 116,653 | $ 103,004 | |
Restricted cash | - | 2,808 | |
Trade and other receivables | 3,542 | 3,241 | |
Derivative financial asset | 1,382 | - | |
Inventories | 122,025 | 142,302 | |
Prepaid expenses and other assets | 16,341 | 14,502 | |
Total Current Assets | 259,943 | 265,857 | |
NON-CURRENT ASSETS | |||
Property and equipment | 69,609 | 63,833 | |
Intangible assets | 1,566 | 2,638 | |
Right-of-use assets | 131,457 | 79,894 | |
Pension asset | 1,149 | - | |
Deferred income taxes | 27,026 | 32,308 | |
Total Non-Current Assets | 230,807 | 178,673 | |
TOTAL ASSETS | $ 490,750 | $ 444,530 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
CURRENT LIABILITIES | |||
Trade and other payables | $ 61,754 | $ 81,087 | |
Deferred revenue | 11,939 | 14,100 | |
Income taxes payable | 445 | 1,018 | |
Current portion of lease liabilities | 31,329 | 26,741 | |
Total Current Liabilities | 105,467 | 122,946 | |
NON-CURRENT LIABILITIES | |||
Lease liabilities | 106,265 | 60,758 | |
Total Non-Current Liabilities | 106,265 | 60,758 | |
SHAREHOLDERS' EQUITY | |||
Share capital | 28,292 | 27,406 | |
Contributed surplus | 11,207 | 10,871 | |
Retained earnings | 238,668 | 223,593 | |
Accumulated other comprehensive income (loss) | 851 | (1,044) | |
Total Shareholders' Equity | 279,018 | 260,826 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 490,750 | $ 444,530 | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY For the years ended (Unaudited) (in thousands of Canadian dollars) | ||||||||
Share Capital | Contributed | Retained | Accumulated Other | Total | ||||
Balance as at | $ 27,406 | $ 10,871 | $ 223,593 | $ (1,044) | $ 260,826 | |||
Net earnings | - | - | 14,815 | - | 14,815 | |||
Total other comprehensive income | - | - | 260 | 1,895 | 2,155 | |||
Total comprehensive income for the year | - | - | 15,075 | 1,895 | 16,970 | |||
Share options exercised | 886 | (243) | - | - | 643 | |||
Share-based compensation costs | - | 579 | - | - | 579 | |||
Total contributions by owners of the | 886 | 336 | - | - | 1,222 | |||
Balance as at | $ 28,292 | $ 11,207 | $ 238,668 | $ 851 | $ 279,018 | |||
Balance as at | $ 27,406 | $ 10,295 | $ 146,980 | $ (853) | $ 183,828 | |||
Net earnings | - | - | 77,667 | - | 77,667 | |||
Total other comprehensive loss | - | - | (1,054) | (191) | (1,245) | |||
Total comprehensive income (loss) for the | - | - | 76,613 | (191) | 76,422 | |||
Share-based compensation costs | - | 576 | - | - | 576 | |||
Total contributions by owners of the | - | 576 | - | - | 576 | |||
Balance as at | $ 27,406 | $ 10,871 | $ 223,593 | $ (1,044) | $ 260,826 | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of Canadian dollars) | ||||||
For the 14 | For the 13 | For the 53 | For the 52 weeks ended | |||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net (loss) earnings | $ (13) | $ 27,454 | $ 14,815 | $ 77,667 | ||
Adjustments for: | ||||||
Depreciation, amortization and net impairment losses on | 3,907 | 3,838 | 14,203 | 15,582 | ||
Depreciation on right-of-use assets | 9,884 | 7,916 | 34,314 | 28,902 | ||
Share-based compensation costs | 103 | 205 | 579 | 576 | ||
Net change in transfer of realized gain on cash flow hedges to | (80) | - | (224) | - | ||
Foreign exchange (gain) loss | (173) | 314 | (1,714) | (1,628) | ||
Loss on foreign currency translation differences reclassified | - | - | 1,044 | - | ||
Interest on lease liabilities | 2,401 | 1,384 | 7,562 | 4,939 | ||
Interest on revolving credit | - | - | - | 445 | ||
Interest income | (1,872) | (1,464) | (5,200) | (1,952) | ||
Income tax (recovery) expense | (239) | (31,653) | 5,324 | (32,098) | ||
13,918 | 7,994 | 70,703 | 92,433 | |||
Changes in: | ||||||
Trade and other receivables | 555 | 728 | 126 | 4,657 | ||
Inventories | 25,880 | 17,439 | 20,277 | (23,330) | ||
Prepaid expenses and other assets | (502) | 8,263 | (1,839) | 28,088 | ||
Trade and other payables | (2,373) | 14,654 | (20,539) | 46,831 | ||
Pension asset | 108 | (463) | (795) | (450) | ||
Deferred revenue | 342 | 3,256 | (2,161) | 610 | ||
37,928 | 51,871 | 65,772 | 148,839 | |||
Interest paid | - | - | - | (486) | ||
Interest received | 1,494 | 1,280 | 4,773 | 1,660 | ||
Income taxes paid | (425) | - | (1,017) | (46) | ||
Net cash flows from operating activities | 38,997 | 53,151 | 69,528 | 149,967 | ||
CASH FLOWS USED IN INVESTING ACTIVITIES | ||||||
Additions to property and equipment and intangible assets | (8,835) | (5,018) | (17,702) | (10,651) | ||
Cash flows used in investing activities | (8,835) | (5,018) | (17,702) | (10,651) | ||
CASH FLOWS USED IN FINANCING ACTIVITIES | ||||||
Release of restricted cash | - | (25) | 2,808 | (51) | ||
Net repayment of revolving credit facility | - | - | - | (29,634) | ||
Payment of lease liabilities | (14,904) | (9,223) | (43,352) | (33,674) | ||
Proceeds from issuance of share capital | - | - | 643 | - | ||
Cash flows used in financing activities | (14,904) | (9,248) | (39,901) | (63,359) | ||
FOREIGN EXCHANGE GAIN (LOSS) ON CASH HELD IN FOREIGN CURRENCY | 120 | (179) | 1,724 | 1,545 | ||
NET INCREASE IN CASH | 15,378 | 38,706 | 13,649 | 77,502 | ||
CASH, BEGINNING OF THE PERIOD | 101,275 | 64,298 | 103,004 | 25,502 | ||
CASH, END OF THE PERIOD | $ 116,653 | $ 103,004 | $ 116,653 | $ 103,004 |
SOURCE
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