Canada's Reitmans posts 17% profit jump in Q2 FY25

Reitmans (Canada) Limited, one of the country’s leading specialty apparel retailers, posted a solid financial performance for its fiscal 2025 (FY25) second quarter (Q2), ended August 3, despite ongoing consumer spending challenges. Net earnings rose by 17.2 per cent to $15.7 million, with adjusted EBITDA up 21.9 per cent to $23.4 million compared to Q2 FY24.

The company reported a 0.4 per cent increase in net revenues, reaching $215.5 million, and a notable 330-basis-point jump in gross profit margin to 59.1 per cent. Comparable sales, including e-commerce, rose 3.5 per cent.

Reitmans' focus on fewer promotions boosted profitability, offsetting higher selling and administrative expenses. Total assets grew to $519.3 million, supported by a robust cash balance of $124 million, the company said in a press release.

For the first half (H1) of FY25, net revenues were $381.3 million, representing a 0.3 per cent increase from $380.3 million in FY24. Gross profit increased by 6.2 per cent, rising from $208.4 million in H1 FY24 to $221.3 million in H1 FY25. The gross profit percentage improved by 320 basis points, reaching 58.0 per cent compared to 54.8 per cent in the previous year.

Selling, general, and administrative expenses grew by 4.1 per cent, from $193.1 million in H1 FY24 to $201.0 million in H1 FY25. Net earnings were up by 49.5 per cent, increasing from $9.5 million in the H1 FY24 to $14.2 million in the same period in this fiscal. Adjusted EBITDA rose by 35.2 per cent to $24.2 million in period under review.

Basic earnings per share increased by 45.0 per cent, reaching $0.29 in the first half of this fiscal compared to $0.20 in the same period in the previous fiscal, while diluted earnings per share rose by 52.6 per cent, from $0.19 to $0.29, the release added.

"We had an excellent second quarter and one of our best quarters of the past ten years," said Andrea Limbardi, president and CEO of RCL. "Despite operating 16 fewer stores compared to the same period last year, our net revenues were up slightly, underscoring how strongly our product offering resonated with our customers. Our teams successfully navigated supply chain challenges and avoided late deliveries, which ensured our stores had the right inventory at the right time. We read summer trends well, benefited from favourable weather, and successfully drove higher sales dollars and units per transaction. All of that, in addition to being less promotional during the quarter, contributed to improved gross margins and higher profitability."

"This is an exciting time for our business. We see a lot of opportunity for continued growth, selectively and strategically expanding our footprint in all three retail brands and doubling down on our menswear business. The ongoing modernization of our distribution facility remains on track and will ultimately help support our long-term vision. While the overall retail environment continues to be affected by economic uncertainty and logistics issues, we are well-positioned to drive profitable growth," said Limbardi.

Fibre2Fashion News Desk (HU)