Q3 revenue increased by 15.4% to
Q3 Adjusted ROA1 decreased to
Q3 Adjusted EBITDA from continuing operations1 decreased to
Q3 YTD revenue increased by 24.8% to
Q3 YTD Adjusted ROA1 increased to
Q3 YTD Adjusted EBITDA from continuing operations1 increased to
Unless otherwise indicated, all comparisons of results for the 13 weeks ended
13 weeks ended
Sales for the third quarter of 2023 increased by
Gross profit for the third quarter of 2023 increased
Net earnings from continuing operations for the third quarter of 2023 were
Adjusted results from operating activities ("Adjusted ROA") for the third quarter of 2023 was
Adjusted EBITDA from continuing operations for the third quarter of 2023 was
39 weeks ended
Sales for the year to date fiscal 2023 increased by
Gross profit for the year to date fiscal 2023 increased
Net earnings from continuing operations for the year to date fiscal 2023 was
Adjusted ROA for the year to date fiscal 2023 was
Adjusted EBITDA from continuing operations for the year to date fiscal 2023 was
About
The Company is a leading women's specialty apparel retailer with retail outlets throughout
1NON-GAAP Financial Measures & Supplementary Financial measures
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.
Non-GAAP Financial Measures
This press announcement discusses adjusted earnings from continuing operations before interest, taxes, depreciation and amortization ("Adjusted EBITDA from continuing operations") and adjusted results from operating activities ("Adjusted ROA") and both are considered non-GAAP financial measures. This press announcement also indicates Adjusted EBITDA from continuing operations as a percentage of sales and is considered a non-GAAP financial ratio. The intent of presenting Adjusted EBITDA from continuing operations and Adjusted ROA is to provide additional useful information to investors and analysts. Adjusted EBITDA from continuing operations is defined as net earnings (loss) before income tax expense/recovery, interest income, interest expense, depreciation, amortization, 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 costs and recoveries. Management believes that Adjusted EBITDA from continuing operations 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 the metric for this purpose. Management believes that Adjusted EBITDA from continuing operations as a percentage of sales indicates how much liquidity is generated for each dollar of sales. 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 impairment charges, other than depreciation related to right-of-use assets as explained hereafter, eliminates the non-cash impact, and the exclusion of restructuring items and Federal subsidies 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 from continuing operations 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 from continuing operations, as this better reflects the operational cash flow impact of its leases.
Adjusted ROA is defined as results from operating activities excluding Federal subsidies and restructuring costs and recoveries. Management believes that Adjusted ROA provides a more relevant indicator in assessing current operational performance. The exclusion of restructuring items and Federal subsidies presents the on-going operational performance of the business.
Reconciliation of NON-GAAP Financial Measures
The tables below provide a reconciliation of net earnings from continuing operations to Adjusted EBITDA from continuing operations and results from operating activities to Adjusted ROA:
For the third quarter of | Year to date fiscal | |||
2023 | 2022 | 2023 | 2022 | |
Net earnings from continuing operations | $ 14.6 | $ 22.0 | $ 50.2 | $ 45.9 |
Depreciation, amortization and net impairment | 3.5 | 4.4 | 11.7 | 13.3 |
Depreciation on right-of-use assets | 7.9 | 7.1 | 21.0 | 22.4 |
Interest income | (0.3) | (0.1) | (0.5) | (0.2) |
Interest expense on lease liabilities | 1.3 | 1.0 | 3.6 | 3.1 |
Interest expense on revolving credit facility | - | - | 0.4 | - |
Income tax expense (recovery) | 0.1 | (0.6) | (0.4) | (0.4) |
Rent impact from IFRS 16, Leases1 | (9.2) | (8.1) | (24.6) | (25.5) |
Federal subsidies | - | (1.6) | (1.2) | (18.1) |
Restructuring costs (recoveries), net | 0.1 | (0.3) | 0.5 | (12.7) |
Adjusted EBITDA from continuing |
$ 18.0 |
$ 23.8 |
$ 60.7 |
$ 27.8 |
Adjusted EBITDA from continuing operations as |
8.8 % |
13.4 % |
10.3 % |
5.9 % |
1 Rent Impact from IFRS 16, Leases is comprised as follows; |
For the third quarter of | Year to date fiscal | |||
2023 | 2022 | 2023 | 2022 | |
Depreciation on right-of-use assets | $ 7.9 | $ 7.1 | $ 21.0 | $ 22.4 |
Interest expense on lease liabilities | 1.3 | 1.0 | 3.6 | 3.1 |
Rent impact from IFRS 16, Leases | $ 9.2 | $ 8.1 | $ 24.6 | $ 25.5 |
2 As a result of the current definition of Adjusted EBITDA from continuing operations, the comparative figure has been restated to include the rent impact from IFRS 16, Leases of |
For the third quarter of | Year to date fiscal | |||
2023 | 2022 | 2023 | 2022 | |
Results from operating activities | $ 15.1 | $ 21.6 | $ 52.6 | $ 47.0 |
Federal subsidies | - | (1.6) | (1.2) | (18.1) |
Restructuring costs (recoveries), net | 0.1 | (0.3) | 0.5 | (12.7) |
Adjusted ROA | $ 15.2 | $ 19.7 | $ 51.9 | $ 16.2 |
Supplementary Financial Measures
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 sales generated by stores that have been continuously open during both of the periods being compared and include e-commerce 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 sales and considers it useful in helping to determine what portion of new 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.
At various times throughout fiscal 2022, the Company was required to temporary close some of its retail stores as a consequence of governmental lockdown directives. Due to the unprecedented nature of COVID-19 and its significant impact on consumers and our ability to service our customers, management believes that comparable sales were not representative of the underlying trends of our business and consequently would not provide a meaningful metric in comparisons of year-over-year sales results until the end of the second quarter of 2023. Accordingly, this press announcement does not include a discussion of the Company's comparable sales in respect of the year to date fiscal 2023. However, it does include a discussion of the Company's comparable sales for the third quarter of fiscal 2023 as compared to the third quarter of 2022 given that the Company's store network was operating at full capacity in both the third quarter of 2023 and 2022.
This press announcement discloses the Company's e-commerce net sales as a percentage of the Company's net sales and is defined as the net sales recognized from its e-commerce channel in relation to the Company's net sales. This supplementary financial measure does not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures used by other companies. Management uses this measure to analyze trends in the customers' cross-channel behaviour for operating and capital expenditure funding allocation decisions.
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 regarding the impact of COVID-19 on the Company's business, 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 Risk Management" and "Financial Risk Management" sections 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 third quarter of 2023.
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 the third quarter of 2023 are available online at www.sedar.com.
President and Chief Executive Officer
Telephone: (514) 384-1140
Corporate Website: www.reitmanscanadalimited.com
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF EARNINGS (Unaudited) (in thousands of Canadian dollars except per share amounts) | |||||
For the 13 weeks ended | For the 39 weeks ended | ||||
Sales | |||||
Cost of goods sold | 88,133 | 76,839 | 248,578 | 214,774 | |
Gross profit | 117,475 | 101,345 | 340,111 | 256,958 | |
Selling and distribution expenses | 89,293 | 71,066 | 250,757 | 196,322 | |
Administrative expenses | 13,073 | 9,005 | 36,257 | 26,362 | |
Restructuring | 73 | (307) | 480 | (12,726) | |
Results from operating activities | 15,036 | 21,581 | 52,617 | 47,000 | |
Finance income | 924 | 723 | 1,151 | 1,576 | |
Finance costs | 1,282 | 889 | 4,000 | 3,056 | |
Earnings before income taxes | 14,678 | 21,415 | 49,768 | 45,520 | |
Income tax expense (recovery) | 67 | (574) | (445) | (388) | |
Net earnings from continuing operations | 14,611 | 21,989 | 50,213 | 45,908 | |
Earnings from discontinued operations, net of tax | - | 4,839 | - | 15,032 | |
Net earnings | $ 14,611 | $ 26,828 | $ 50,213 | $ 60,940 | |
Earnings per share: | |||||
Basic | $ 0.30 | $ 0.55 | $ 1.03 | $ 1.25 | |
Diluted | 0.30 | 0.55 | 1.03 | 1.25 | |
Earnings per share from continuing operations: | |||||
Basic | $ 0.30 | $ 0.45 | $ 1.03 | $ 0.94 | |
Diluted | 0.30 | 0.45 | 1.03 | 0.94 |
REITMANS ( CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (in thousands of Canadian dollars) | |||||
For the 13 weeks ended | For the 39 weeks ended | ||||
Net earnings | $ 14,611 | $ 26,828 | $ 50,213 | $ 60,940 | |
Other comprehensive income | |||||
Items that are or may be reclassified subsequently | |||||
Foreign currency translation differences | (270) | 29 | (288) | 152 | |
Items that will not be reclassified to net earnings: | |||||
Net actuarial gain on defined benefit plan (net of | 323 | - | 194 | - | |
Total other comprehensive income | 53 | 29 | (94) | 152 | |
Total comprehensive income | $ 14,664 | $ 26,857 | $ 50,119 | $ 61,092 |
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS (Unaudited) (in thousands of Canadian dollars) | ||||
ASSETS | ||||
CURRENT ASSETS | ||||
Cash | $ 64,298 | $ 84,671 | $ 25,502 | |
Restricted cash | 2,783 | - | - | |
Trade and other receivables | 3,785 | 6,138 | 7,606 | |
Inventories | 159,741 | 133,533 | 118,972 | |
Prepaid expenses and other assets | 22,765 | 36,709 | 42,590 | |
Total Current Assets | 253,372 | 261,051 | 194,670 | |
NON-CURRENT ASSETS | ||||
Restricted cash | - | 2,756 | 2,757 | |
Property and equipment | 61,145 | 62,694 | 65,970 | |
Intangible assets | 3,081 | 7,460 | 5,613 | |
Right-of-use assets | 69,461 | 39,449 | 44,978 | |
Pension asset | 1,235 | - | 100 | |
Deferred income taxes | 186 | 151 | 186 | |
Total Non-Current Assets | 135,108 | 112,510 | 119,604 | |
TOTAL ASSETS | $ 388,480 | $ 373,561 | $ 314,274 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
CURRENT LIABILITIES | ||||
Revolving credit facility | $ - | $ - | $ 29,634 | |
Trade and other payables | 65,368 | 40,731 | 34,478 | |
Deferred revenue | 10,844 | 10,526 | 13,490 | |
Income taxes payable | 998 | 664 | 537 | |
Current portion of lease liabilities | 25,520 | 22,427 | 20,888 | |
Liabilities subject to compromise | - | 185,565 | - | |
Total Current Liabilities | 102,730 | 259,913 | 99,027 | |
NON-CURRENT LIABILITIES | ||||
Lease liabilities | 51,432 | 27,228 | 31,419 | |
Pension liability | - | 3,643 | - | |
Total Non-Current Liabilities | 51,432 | 30,871 | 31,419 | |
SHAREHOLDERS' EQUITY | ||||
Share capital | 27,406 | 27,406 | 27,406 | |
Contributed surplus | 10,666 | 10,295 | 10,295 | |
Retained earnings | 197,387 | 45,778 | 146,980 | |
Accumulated other comprehensive loss | (1,141) | (702) | (853) | |
Total Shareholders' Equity | 234,318 | 82,777 | 183,828 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 388,480 | $ 373,561 | $ 314,274 |
(1) | As at |
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (in thousands of Canadian dollars) | |||||
Share | Contributed | Retained | Accumulated Other | Total | |
Balance as at | $ 27,406 | $ 10,295 | $ 146,980 | $ (853) | $ 183,828 |
Net earnings | - | - | 50,213 | - | 50,213 |
Total other comprehensive income (loss) | - | - | 194 | (288) | (94) |
Total comprehensive income (loss) for the period | - | - | 50,407 | (288) | 50,119 |
Share-based compensation costs | - | 371 | - | - | 371 |
Total contributions by owners of the Company | - | 371 | - | - | 371 |
Balance as at | $ 27,406 | $ 10,666 | $ 197,387 | $ (1,141) | $ 234,318 |
Balance as at | $ 27,406 | $ 10,295 | $ (15,162) | $ (854) | $ 21,685 |
Net earnings | - | - | 60,940 | - | 60,940 |
Total other comprehensive income | - | - | - | 152 | 152 |
Total comprehensive income for the period | - | - | 60,940 | 152 | 61,092 |
Balance as at | $ 27,406 | $ 10,295 | $ 45,778 | $ (702) | $ 82,777 |
REITMANS ( CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of Canadian dollars) | ||||
For the 13 weeks ended | For the 39 weeks ended | |||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net earnings | $ 14,611 | $ 26,828 | $ 50,213 | $ 60,940 |
Adjustments for: | ||||
Depreciation, amortization and net impairment losses on | 3,534 | 4,430 | 11,744 | 13,323 |
Depreciation on right-of-use assets | 7,893 | 7,063 | 20,986 | 22,311 |
Share-based compensation costs | 181 | - | 371 | - |
Foreign exchange (gain) loss | (1,357) | 334 | (1,942) | 1,789 |
Gain on lease re-measurements due to restructuring | - | (71) | - | (5,073) |
Interest on lease liabilities | 1,282 | 889 | 3,555 | 3,056 |
Interest on revolving credit | - | - | 445 | - |
Interest income | (333) | (94) | (488) | (230) |
Income tax expense (recovery) | 67 | (574) | (445) | (388) |
25,878 | 38,805 | 84,439 | 95,728 | |
Changes in: | ||||
Trade and other receivables | 1,263 | (832) | 3,929 | 4,521 |
Inventories | (5,991) | (23,733) | (40,769) | (37,411) |
Prepaid expenses and other assets | 8,450 | 907 | 19,825 | (4,609) |
Pension asset | (131) | 183 | 13 | 550 |
Trade and other payables | 8,103 | 3,038 | 32,177 | 9,058 |
Liabilities subject to compromise | - | (7,113) | - | (17,467) |
Deferred revenue | (1,117) | (763) | (2,646) | (1,936) |
Cash from operating activities | 36,455 | 10,492 | 96,968 | 48,434 |
Interest paid | (5) | - | (486) | - |
Interest received | 232 | 106 | 380 | 239 |
Income taxes paid | - | - | (46) | (1,168) |
Net cash flows from operating activities | 36,682 | 10,598 | 96,816 | 47,505 |
CASH FLOWS USED IN INVESTING ACTIVITIES | ||||
Additions to property and equipment and intangible assets, net | (2,383) | (4,032) | (5,633) | (6,882) |
Cash flows used in investing activities | (2,383) | (4,032) | (5,633) | (6,882) |
CASH FLOWS USED IN FINANCING ACTIVITIES | ||||
Restricted cash | (18) | (1) | (26) | (3) |
Net repayment of revolving credit facility | - | - | (29,634) | - |
Payment of lease liabilities | (9,373) | (9,190) | (24,451) | (29,455) |
Cash flows used in financing activities | (9,391) | (9,191) | (54,111) | (29,458) |
FOREIGN EXCHANGE GAIN (LOSS) ON CASH HELD IN FOREIGN CURRENCY | 1,217 | (291) | 1,724 | (1,656) |
NET INCREASE (DECREASE) IN CASH | 26,125 | (2,916) | 38,796 | 9,509 |
CASH, BEGINNING OF THE PERIOD | 38,173 | 87,587 | 25,502 | 75,162 |
CASH, END OF THE PERIOD | $ 64,298 | $ 84,671 | $ 64,298 | $ 84,671 |
SOURCE
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