Reitmans (Canada) Limited Reports Fourth Quarter and Fiscal 2025 Financial Results

Proudly Canadian retailer plans to reach $1 billion in annual net revenues by the end of fiscal 20301

MONTREAL, April 10, 2025 /CNW/ - Reitmans (Canada) Limited ("RCL" or the "Company") (TSXV:RET) (TSXV: RET-A), one of Canada's leading specialty apparel retailers, today reported its financial results for the fourth quarter and year ended February 1, 2025. Unless otherwise indicated, all comparisons are to the fourth quarter and year ended February 3, 2024, results of which are inclusive of an additional week compared to the corresponding periods in fiscal 2025 due to the Company's floating year end. All dollar amounts are in Canadian currency.

Highlights

When excluding the 53rd week of the prior year, net revenues decreased 1.4% to $773.8 million for the year and 2.9% to $204.8 million for the quarter.

Comparable sales2, which include e-commerce net revenues, decreased 0.6% for the year and were essentially flat for the quarter.

Gross profit % was up 200 basis points to 56.2% for the year and flat for the quarter at 51.9%.

Adjusted EBITDA2 decreased $3.8 million to $25.4 million for the year and was a loss of $2.6 million for the quarter.

Net earnings decreased $2.7 million to $12.1 million for the year and was a loss of $4.2 million for the quarter.

"This past holiday season, we had one of our strongest ever Black Friday and Cyber Monday performance, as well as a very good lead-up to Christmas and Boxing Week," said Andrea Limbardi, President and CEO of RCL. "The success of those shopping events largely offset the impact of warmer weather in the first half of the quarter, which delayed consumers transitioning to winter apparel. Overall, our brands remained on point with Reitmans growth as a gifting destination and menswear at RW&CO continuing to perform very well as it had all year, aligned with our respective strategies."

"We accomplished a lot in fiscal 2025. We continued to innovate and evolve our supply chain operations, replacing existing sorters in our Montreal distribution centre with the SORTRAK© Inventory Systems to streamline our store inventory management. We're pleased to share that the implementation was successful and has been completed. We also made the strategic decision to streamline our operations by closing Thyme Maternity and RCL Market in January of 2025. Finally, we finished the year with a remarkably strong balance sheet, including a significant cash position, very healthy inventory level, and no debt."

"Looking ahead, RCL is primed to expand and optimize our store footprint. We've recently finalized our new five-year strategy focused on profitably driving accelerated brand growth, fueling growth with modernization, and igniting high performance. We expect to reinvest over $100 million over the next five years on capital projects focused on growth1. Our ambition is to reach $1 billion in annual net revenue with Adjusted EBITDA1 to grow to $60-70 million by the end of fiscal 20301. We have three unique brands, each with their own unique value propositions, and our objective is to amplify the power of our brands to deliver on-trend fashion that Canadians will love, for years to come."

1

See "Forward-Looking Statements".  

2

This is a Non-GAAP Financial Measure. See "Non-GAAP Financial Measures & Supplementary Financial Measures" for reconciliation of these measures.  

Selected Financial Information

(in millions of dollars, exceptfor gross profit % and earningsper share) (unaudited)

Fourth quarter

Fiscal Year

2025

2024

Change

2025

2024

Change

Net revenues

$204.8

$221.0

(7.3 %)

$773.8

$794.7

(2.6 %)

Gross profit

$106.2

$114.9

(7.6 %)

$435.0

$431.0

0.9 %

Gross profit %

51.9 %

52.0 %

(10 bps)

56.2 %

54.2 %

200 bps

Selling, general andadministrative expenses2 

 

$112.6

 

$114.4

 

(1.6 %)

 

$417.2

 

$408.1

 

2.2 %

Net (loss) earnings

($4.2)

$0.0

-

$12.1

$14.8

(18.2 %)

Adjusted EBITDA1

($2.6)

$1.7

-

$25.4

$29.2

(13.0 %)

Earnings (loss) per share:

       Basic

($0.08)

$0.00

-

$0.25

$0.30

(16.7 %)

       Diluted

($0.08)

$0.00

-

$0.24

$0.30

(20.0 %)

1

This is a Non-GAAP Financial Measure. See "Non-GAAP Financial Measures & Supplementary Financial Measures" for reconciliations of these measures.  

2

In order to align to presentation in the industry, previously captioned selling, distribution and administrative expenses for fiscal 2024 are now captioned as selling, general and administrative expenses.

On February 1, 2025, RCL had working capital1 of $165.7 million, including cash of $158.1 million compared to working capital of $154.4 million, including cash of $116.7 million at the prior year end. As at February 1, 2025 and February 3, 2024, RCL had no long-term debt other than lease liabilities and no amounts were drawn under the Company's bank credit facilities.

Fourth Quarter Overview

Net revenues decreased by $16.2 million, or 7.3%, to $204.8 million, primarily due to the inclusion of an extra week in the fourth quarter a year earlier and a lower store count year-over-year. Comparable sales1, which include e-commerce net revenues, decreased 0.2%, primarily due to unseasonably warm weather in the first half of the quarter delaying sales of winter apparel.

Gross profit decreased by $8.7 million to $106.2 million, primarily due to one less week of revenue contribution. Gross profit as a percentage of net revenues was 51.9%, which was essentially flat compared to the same quarter in the prior year.

Adjusted EBITDA1 decreased by $4.3 million to a loss of $2.6 million. The decrease was largely due to lower gross profit and higher occupancy costs as many previously preferential rent arrangements have been renewed at closer to market lease rates, and higher performance incentive plan expense.

Net loss was $4.2 million compared to nil in the fourth quarter of the prior year.

Conference Call

The Company will host a conference call on April 11, 2025, at 8:30 am Eastern Time to discuss its fourth quarter and full year financial results. Interested parties may join the conference call by dialing 1-844-763-8274 or 647-484-8814 approximately 15 minutes prior to the call to secure a line.

A live audio webcast of the call will be available at https://www.reitmanscanadalimited.com/events-presentations.aspx?lang=en and will be available for replay at this website for 12 months.

Granting of Options to Management

On April 10, 2025, the Company granted an aggregate of 25,000 options to purchase Class A non-voting shares of the Company (the "Options") to a member of management pursuant to its second amended and restated share option plan dated April 19, 2021, as amended. The Options have an exercise price of $2.03 and are subject to time-based vesting terms and have an expiry date of May 10, 2028. The grant of the Options is made pursuant to the Company's Long-Term Incentive Plan which is designed to incentivize members of management in the achievement of long-term financial targets.

About Reitmans (Canada) Limited

Reitmans (Canada) Limited is one of Canada's leading specialty apparel retailers for women and men, with retail outlets throughout the country. The Company operates 390 stores under three distinct banners consisting of 222 Reitmans, 86 PENN. Penningtons, and 82 RW&CO.

For more information, visit www.reitmanscanadalimited.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information, please contact:

Alexandra Cohen

VP, Corporate Communications

Reitmans (Canada) Limited

Telephone: (514) 384-1140 ext 23737  

Email:

Caroline Goulian

Chief Financial Officer

Reitmans (Canada) Limited

Telephone: (514) 384-1140

Email:

NON-GAAP Financial Measures & Supplementary Financial Measures

This press release makes reference to certain non-GAAP financial measures. These financial measures are not recognized measures under International Financial Reporting Standards ("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 release discusses the following non-GAAP financial measures: adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") and working capital. This press release also indicates Adjusted EBITDA as a percentage of net revenues and is less discounts and returns ("net sales") and includes shipping fees charged to customers on e-commerce orders. Adjusted EBITDA is currently defined as net earnings before depreciation, amortization, net impairment of non-financial assets, interest expense, interest income, income tax expense/recovery,  net pension settlement costs, contract termination costs, loss on foreign currency translation differences reclassified to net earnings, pension curtailment gain, and adjusted for the impact of certain items, including a deduction of interest expense and depreciation relating to leases accounted for under IFRS 16, Leases. 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 losses, other than depreciation related to right-of-use assets as explained hereafter, eliminates the non-cash impact, and the exclusion of net pension settlement costs, contract termination costs, 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.

Working capital is defined as current assets less current liabilities.  Management believes that working capital provides information that is helpful to understand the financial condition of the Company. Due to the seasonality of the Company's business, it is more relevant to compare the working capital position at the same point in time.

Reconciliation of NON-GAAP Measures

The tables below provide a reconciliation of net earnings to Adjusted EBITDA:

(in millions of dollars)

Fourth quarter of

Fiscal

2025

2024

2025

2024

Net (loss) earnings

$(4.2)

$0.0

$12.1

$14.8

Depreciation, amortization and net    impairment losses on property and    equipment, and intangible assets

3.5

3.9

14.4

14.2

Depreciation on right-of-use assets

10.2

9.9

39.4

34.3

Interest expense on lease liabilities

2.5

2.4

10.0

7.6

Interest income

(1.6)

(1.9)

(5.8)

(5.2)

Income tax (recovery) expense

(2.0)

(0.3)

3.8

5.3

Net pension settlement costs1

1.2

-