Home Brand News Reitmans (Canada) Limited announces its results for the 13 and 52 weeks...

Reitmans (Canada) Limited announces its results for the 13 and 52 weeks ended February 2, 2019

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Results from operating activities for the 52 weeks ended February 2, 2019 (“fiscal 2019”) were $18.2 million as compared to a loss of $27.2 million for the 53 weeks ended February 3, 2018 (“fiscal 2018”), which included a $26.3 milliongoodwill impairment charge. Excluding the impact of the impairment of goodwill in fiscal 2018, results from operating activities were a loss of $0.9 million. The improvement of $19.1 million in fiscal 2019 is primarily attributable to a reduction in selling, distribution and administrative costs of $33.9 million, partially offset by a reduction in gross profit of $14.8 million.

Sales for fiscal 2019 decreased by $41.4 million or 4.3%, to $923.0 million, as compared with fiscal 2018. The decrease is primarily attributable to a net reduction of 42 stores and the impact of having an additional week in fiscal 2018 of approximately $12.4 million in sales. The inclusion of the extra week in fiscal 2018 is due to the Company’s floating year-end. The Company continues to execute against a plan adapting to the new retail environment by reducing its store presence in select markets while enhancing its e-commerce capabilities. Comparable sales1, which include e-commerce sales, decreased 0.6%.

Gross profit for fiscal 2019 decreased $14.8 million or 2.8%, to $509.5 million as compared with $524.3 million for fiscal 2018. This decrease was primarily due to the impact of having an additional week in fiscal 2018 of approximately $6.9 million in gross profit, and increased promotional activity in fiscal 2019. Gross profit as a percentage of sales for fiscal 2019 increased to 55.2% from 54.4% for fiscal 2018 due to the positive foreign exchange impact of approximately $7.7 million on U.S. dollar denominated purchases included in cost of goods sold.

Net earnings for fiscal 2019 were $6.8 million ($0.11 basic and diluted earnings per share) as compared with $16.0 million net loss ($0.25 basic and diluted loss per share) for fiscal 2018. The improvement in net earnings of $22.8 millionis primarily attributable to the $26.3 million goodwill impairment charge incurred during fiscal 2018 and the increase in results from operating activities, offset by the decrease in net finance income and the increase in income tax expense.

Excluding the impact of the impairment of goodwill in fiscal 2018, net earnings for fiscal 2019 of $6.8 million ($0.11 basic and diluted earnings per share) compared to $10.3 million net earnings ($0.16 basic and diluted earnings per share) for fiscal 2018. The decrease in net earnings of $3.5 million in fiscal 2019 is primarily attributable to the decrease in net finance income and the increase in income tax expense, partially offset by the increase in results from operating activities.

Adjusted EBITDA1 for fiscal 2019 was $57.7 million as compared with $43.7 million for fiscal 2018, an increase of $14.0 million. The improvement in adjusted EBITDA is primarily due to the reduction in selling, distribution and administrative costs, partially offset by the decrease in gross profit.

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