Release Date: June 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Reitmans (Canada) Ltd (RTMAF, Financial) achieved a 1% increase in e-commerce revenue, indicating growth in their online sales channel.
- The company strategically opened six new stores during the quarter, which have shown strong growth and performance.
- Reitmans (Canada) Ltd (RTMAF) maintains a strong and diversified supply chain, helping mitigate risks from geopolitical tensions and natural disasters.
- The company has a robust cash position of $85.4 million and no long-term debt, providing financial stability.
- Reitmans (Canada) Ltd (RTMAF) is investing in modernization, including a digital strategic roadmap and migration to the Shopify platform, to enhance customer experience.
Negative Points
- Total net revenues fell by 4.1% to $158.9 million, primarily due to lower in-store traffic and cautious consumer spending.
- The company reported an adjusted EBITDA loss of $10.6 million, compared to a positive $900,000 in the prior year.
- Gross profit decreased by $5.4 million, with a gross profit margin down 100 basis points to 55.7%.
- SG&A expenses increased by 4.2%, driven by higher occupancy and in-store personnel costs.
- Reitmans (Canada) Ltd (RTMAF) faced a net loss of $10 million for the quarter, widening from a $1.5 million loss a year ago.
Q & A Highlights
Q: What makes you think store growth is the answer given the SG&A costs and the current economic conditions? Also, could you address concerns about cost consciousness, such as the Chairman's car allowance?
A: Andrea Limbardi, President and CEO: We believe store growth is beneficial as our recent openings have shown strong performance, exceeding expectations. Renovations have also been successful. However, we recognize SG&A as an area for improvement and are conducting a deep dive to optimize operations and enhance productivity. Regarding cost consciousness, we are committed to addressing these concerns as part of our strategic plan.
Q: There is significant shareholder support for changes at the Board level and in the listing structure. Why hasn't there been engagement from the Chair and Board, and do non-voting shareholders' views matter?
A: Andrea Limbardi, President and CEO: Engaging with shareholders is a priority for us. We have been in communication with shareholders and Board members and will continue to enhance shareholder communications. We are committed to improving our engagement and transparency.
Q: How did the adverse weather conditions impact your financial results for the quarter?
A: Andrea Limbardi, President and CEO: Near-record snowfall in some regions limited in-store traffic in February, contributing to a 4.1% decline in net revenues. While conditions improved later, consumer spending remained cautious due to economic uncertainty.
Q: Can you provide more details on your digital strategic roadmap and its expected impact?
A: Andrea Limbardi, President and CEO: We have commenced the first phase of our digital strategic roadmap, aiming to enhance the digital experience across all touchpoints. This includes redesigning e-commerce storefronts and migrating to the Shopify platform, expected to launch later this fiscal year. This initiative is part of our strategy to drive growth and improve customer experience.
Q: What are the financial targets of your five-year strategic plan, and how do you plan to achieve them?
A: Andrea Limbardi, President and CEO: Our ambition is to reach $1 billion in annual revenues by fiscal 2030 and grow adjusted EBITDA to between $60 million and $70 million. We plan to achieve this by driving efficiencies, improving product speed to market, and maintaining inventory discipline. We will reinvest approximately $100 million in growth initiatives over the next five years, focusing on store investments and digital modernization.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
