Q4 2025 Roots Corp Earnings Call Transcript
Key Points
- Roots Corp (RROTF) reported a 4.5% year-over-year sales growth in Q4 2024, excluding the 53rd week in 2023.
- Direct-to-Consumer segment saw a 7.5% increase in comparable sales, marking the highest growth since 2017.
- Gross margin expanded by 270 basis points, reflecting optimized product costs and reduced discounting.
- Net debt was reduced by 56.7% to $7.3 million, the lowest level ever for the company.
- The company successfully executed several marketing initiatives, including the 'Anything Roots, Everything Holiday' campaign, which improved brand engagement and social media impressions.
- Q4 2024 saw a net loss of $21.7 million due to a non-cash impairment on intangible assets.
- SG&A expenses increased by 9.6% in Q4 2024, driven by higher variable selling costs and marketing expenses.
- Partners & Other sales declined by 8.6% in Q4 2024, primarily due to a temporary reduction in wholesale orders in Taiwan.
- The company faces exposure to USD sourcing, which could impact margins due to foreign exchange volatility.
- Despite strong Q4 performance, the company remains cautious about external market dynamics and consumer confidence.
Good morning. My name is Sammy, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Roots fourth-quarter and fiscal year 2024 earnings conference call. (Operator Instructions)
On the call today, we have Meghan Roach, President and Chief Executive Officer; and Leon Wu, Chief Financial Officer.
Before the conference call begins, the company would like to remind listeners that the call, including the Q&A portion, may include forward-looking statements concerning its current and future plans, expectations and intentions, results, level of activities, performance, goals or achievements, or any other future events or developments. This information is based on management's reasonable assumptions and beliefs in light of information currently available to Roots, and listeners are cautioned not to place undue reliance on such information.
Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected. The company refers listeners to its fourth-quarter
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