Sales from the partners and other (P&O) segment, which includes wholesale Roots-branded products, licensing to select manufacturing partners, and the sale of certain custom products, remained steady at $6.1 million, consistent with Q1 FY23 figures, the company said in a press release.

Roots reported a gross margin of 59.0 per cent, unchanged from the first quarter of last year. However, the DTC gross margin saw an increase to 62.1 per cent from 61.3 per cent, driven by improved product costing and lower discounting.

The company posted a net loss of $8.9 million, compared to a net loss of $8.0 million in Q1 FY23. Adjusted EBITDA amounted to a loss of $8.0 million, versus a loss of $5.8 million in the same period last year. Despite these challenges, Roots achieved a significant reduction in net debt, which decreased by 22.7 per cent year-over-year to $31.7 million. Inventory levels also saw a substantial reduction, decreasing by 30 per cent to $35.4 million from $50.4 million in Q1 FY23.

Selling, general, and administrative expenses totalled $32.0 million, a 3.1 per cent decrease compared to $33 million in Q1 FY23.

"We made significant progress on our strategic initiatives this quarter, marked by robust direct-to-consumer margin growth, reduced debt, and enhanced liquidity and free cash flow on a year-over-year basis. We also recently launched our brand ambassador programme and debuted our AI-driven replenishment system, which will positively enhance our operations, customer experience, and engagement," said Meghan Roach, president & CEO of Roots Corporation.

Fibre2Fashion News Desk (DP)