Comparable sales, which include e-commerce net revenues, decreased 1.9 per cent in the third quarter, despite increased sales dollars per transaction.
Reitmans (Canada) Limited (RCL) has reported a 2.9 per cent decrease in net revenues to $187.7 million in the third quarter, due to fewer stores and unseasonably warm weather affecting fall apparel sales.
Despite this, gross profit remained steady, and gross margin improved.
Adjusted EBITDA fell 60 per cent, impacted by higher occupancy costs and performance expenses.
Gross profit was $107.6 million, on par with the third quarter of 2024, while gross profit as a percentage of net revenues increased 166 basis points to 57.3 per cent. The increase in gross profit as a percentage of net revenues is primarily attributable to lower markdowns and promotional activity compared to the third quarter of last year.
Adjusted EBITDA has decreased 60.0 per cent to $3.8 million in the third quarter. The decrease of $5.7 million was largely due to higher occupancy costs as many previously preferential rent arrangements have been renewed at closer to market lease rates, higher performance incentive plan expense, and an increase in foreign exchange loss, the company said in a press release.
Net earnings were $2.1 million ($0.04 basic and diluted earnings per share) compared to $5.3 million ($0.11 basic and diluted earnings per share) a year earlier.
“The quarter was impacted by warmer weather delaying sales of fall apparel. However, we achieved a higher gross margin rate due to strong inventory control and a continued focus on being less promotional,” said Andrea Limbardi, president and CEO of RCL. “Aligned with our strategic objectives, menswear continued to perform exceptionally well at RW&CO and our customers responded positively to our fall collection in all three brands once the weather cooled.”
“Our store count lowered in comparison to last year as we continue to optimise store locations to align with evolving customer needs. However, we opened three new stores in strategic markets during the quarter and are primed to further expand our footprint and capitalise on RCL’s strong customer loyalty. Additionally, the third quarter saw the successful ongoing modernisation of our distribution center handling system,” added Limbardi.
Fibre2Fashion News Desk (RR)
