Canada's Reitmans' Q3 revenue rises on store expansion & sales gains

The gross margin declined by 110 basis points (bps), primarily due to increased promotional activity and foreign exchange impacts. The gross profit increased 1.9 per cent to $109.6 million, accounting for 56.2 per cent of net revenues.

Selling, general and administrative (SG&A) expenses rose 3.3 per cent to $107.1 million, reflecting investments linked to store openings and ongoing transformation initiatives. Strategic restructuring activities during the quarter resulted in costs of $1.4 million, RCL said in a press release.

Adjusted EBITDA surged 47.4 per cent YoY to $5.6 million, lifting the margin to 2.9 per cent from 2 per cent a year earlier, largely due to higher gross profit. However, net earnings declined to $0.9 million, or $0.02 per share, compared with $2.1 million, or $0.04 per share, in the prior-year quarter.

During the quarter, RCL marked a key milestone with the re-opening of its RW&CO flagship store at Saint-Bruno, showcasing a refreshed visual identity, updated in-store experience and a customer approach aligned with evolving consumer lifestyles.

The company also expanded its physical footprint, opening an RW&CO store in British Columbia, two Reitmans locations in Alberta and Nova Scotia, and two Penningtons stores in Quebec and Nova Scotia.

RCL ended the quarter with working capital of $149.2 million, including cash of $119.4 million. The company reported no significant long-term debt other than lease liabilities and had no amounts drawn under its bank credit facilities, underscoring a solid liquidity position, added the release.

"Net revenues, gross profit, and adjusted EBITDA increased in the third quarter compared to the same period last year, as our five-year strategy continues to take shape," said Andrea Limbardi, president and CEO of RCL.

For the nine months (9M) period, net revenues edged up 0.1 per cent to $569.7 million, while adjusted EBITDA declined 41.4 per cent to $16.4 million. Net earnings for 9M period fell to $4 million from $16.3 million a year earlier, reflecting margin pressures and transformation-related expenses.

ALCHEMPro News Desk (SG)