Reitmans (Canada) Limited Announces Year-End Results

MONTREAL, March 30, 2016 /CNW Telbec/ -

Year ended January 30, 2016

Sales for the year ended January 30, 2016 were $937.2 million as compared with $939.4 million for the year ended January 31, 2015, a decrease of 0.2%, despite a net reduction of 56 stores primarily attributable to the closure of Smart Set stores. Same store sales increased 5.1% with stores increasing 2.5% and e-commerce increasing 69.1%.

The Company's gross margin for the year ended January 30, 2016 decreased to 56.2% compared with 60.4% for the year ended January 31, 2015. Gross profit for the year ended January 30, 2016 decreased $40.2 million or 7.1% to $527.1 million as compared with $567.3 million for the year ended January 31, 2015, with the weakness of the Canadian dollar vis-à-vis the U.S. dollar negatively impacting gross profit by approximately $36.4 million.

Results from operating activities for the year ended January 30, 2016 was a loss of $17.7 million as compared with income of $12.5 million for the year ended January 31, 2015, a decrease of $30.2 million.  In addition to the impact of the weakness of the Canadian dollar was a goodwill impairment expense of $4.2 million.

Net loss for the year ended January 30, 2016 was $24.7 million ($0.39 basic and diluted loss per share) as compared with net earnings of $13.4 million ($0.21 basic and diluted earnings per share) for the year ended January 31, 2015.  Included in net loss is a $16.1 million loss due to a net change in fair value of marketable securities ($3.4 million net gain for the year ended January 31, 2015). For the year ended January 30, 2016, adjusted EBITDA¹ was $36.8 million as compared with $64.8 million in the year ended January 31, 2015, a decrease of $28.0 million.  The reduction in adjusted EBITDA was primarily attributable to lower gross profit as a result of the impact of the weakness of the Canadian dollar vis-à-vis the U.S. dollar as noted above.

Three months ended January 30, 2016

Sales for the three months ended January 30, 2016 were $242.2 million as compared with $236.3 million for the three months ended January 31, 2015, an increase of 2.5%, despite a net reduction of 56 stores primarily attributable to the closure of Smart Set stores.  Same store sales increased 9.0% with stores increasing 6.3% and e-commerce increasing 54.0%.

The Company's gross margin for the three months ended January 30, 2016 decreased to 53.6% from 61.0% for the three months ended January 31, 2015. Gross profit for the three months ended January 30, 2016 decreased $14.3 million or 9.9% to $129.8 million as compared with $144.1 million for three months ended January 31, 2015, with the weakness of the Canadian dollar vis-à-vis the US dollar negatively impacting gross profit by approximately $14.7 million.

Results from operating activities for the three months ended January 30, 2016 was a loss of $13.2 million as compared with income of $4.1 million for the three months ended January 31, 2015, a decrease of $17.3 million.  In addition to the impact of the weakness of the Canadian dollar was a goodwill impairment expense of $4.2 million.

Net loss for the three months ended January 30, 2016 was $16.5 million ($0.26 basic and diluted loss per share) as compared with net earnings of $4.4 million ($0.07 basic and diluted earnings per share) for the three months ended January 31, 2015. Included in net loss is a $5.4 million loss due to a net change in fair value of marketable securities ($3.2 million net gain for the three months ended January 31, 2015). Adjusted EBITDA¹ for the three months ended January 30, 2016 was $2.0 million as compared with $14.2 million for the three months ended January 31, 2015, a decrease of $12.2 million. The reduction in adjusted EBITDA was primarily attributable to lower gross profit as a result of the impact of the weakness of the Canadian dollar vis-à-vis the U.S. dollar as noted above.

Dividends

At the Board of Directors meeting held on March 30, 2016, a quarterly cash dividend (constituting eligible dividends) of $0.05 per share on all outstanding Class A non-voting and Common shares of the Company was declared, payable April 28, 2016 to shareholders of record on April 14, 2016.

About Reitmans (Canada) Limited

The Company is a leading ladieswear specialty apparel retailer with retail outlets throughout Canada.  The Company operates 767 stores consisting of 329 Reitmans, 134 Penningtons, 107 Addition Elle, 83 RW & CO., 68 Thyme Maternity, 17 Hyba and 29 Smart Set. The Company also operates 21 Thyme Maternity shop-in-shop boutiques in select Babies"R"Us locations in Canada.

¹Non-GAAP Financial Measures

The Company has identified several key operating performance measures and non-GAAP financial measures which management believes are useful in assessing the performance of the Company; however, readers are cautioned that some of these measures may not have standardized meanings under IFRS and, therefore, may not be comparable to similar terms used by other companies.

In addition to discussing earnings in accordance with IFRS, this press announcement provides adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") as a non-GAAP financial measure. Adjusted EBITDA is defined as net earnings before income tax expense, other income, dividend income, interest income, net change in fair value of marketable securities, realized gains or losses on disposal of marketable securities, interest expense, impairment of goodwill, depreciation, amortization and net impairment losses. The following table reconciles the most comparable GAAP measure, net earnings or loss, to adjusted EBITDA. 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 the metric for this purpose. The exclusion of dividend, interest income, net change in fair value of marketable securities and realized gains or losses on disposal of marketable securities eliminates the impact on earnings derived from non-operational activities. The exclusion of depreciation, amortization and impairment charges eliminates the non-cash impact. The intent of adjusted EBITDA is to provide additional useful information to investors and analysts and the measure does not have any standardized meaning under IFRS. Adjusted EBITDA should therefore not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate adjusted EBITDA differently. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.

The Company uses a key performance indicator ("KPI"), same store sales, to assess store performance (including each banner's e-commerce store) and sales growth. Same store 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 same store sales metric compares the same calendar days for each period.  Although this KPI is expressed as a ratio, it is a non-GAAP 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 same store sales in evaluating the performance of stores 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. Same store sales is a measure widely used amongst retailers and is considered useful information for both investors and analysts. Same store sales should therefore not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS.

The following table reconciles net (loss) earnings to adjusted EBITDA for the three and twelve months ended January 30, 2016 and January 31, 2015:

 

 

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.  Consequently, actual future results may differ materially from the anticipated results expressed in forward-looking statements, which reflect the Company's expectations only as of the date of this Press Announcement.  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, for the Company contains forward-looking statements about the Company's objectives, plans, goals, 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 anticipated future results and events, 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 MD&A including those listed in the "Operating Risk Management" and "Financial Risk Management" sections of the Company's 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 Management Discussion & Analysis for the year ended January 30, 2016.

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 year ended January 30, 2016 are available online at www.sedar.com.

Montreal, March 30, 2016

Jeremy H. Reitman
Chairman and Chief Executive Officer
Telephone: (514) 385-2630
Corporate Website: www.reitmanscanadalimited.com

 

 

 

 

 

 

 

SOURCE Reitmans (Canada) Limited