Reitmans (Canada) Limited Reports Fourth Quarter and Fiscal 2026 Financial Results
Adjusted EBITDA improved by
Highlights
- Net revenues grew 1.2% to
$207.2 million for the quarter and 0.4% to$776.8 million for the year. - Comparable sales1, which include e-commerce net revenues, were up 0.4% for the quarter but were down 0.7% for the year.
- Gross profit % increased 300 basis points for the quarter but was down 30 basis points for the year.
- Selling General & Administrative (SG&A) expenses, excluding strategic transformation expenses, were relatively flat in the quarter and higher by
$3.5 million for the year. - Adjusted EBITDA1 grew by
$4.8 million to$2.2 million for the quarter but decreased$6.7 million to$18.7 million for the year, mostly due to the first quarter results. - Net loss was
$4.9 million for the quarter and$0.9 million for the year.
"RCL had a solid fourth quarter, with year-over-year growth in net revenues, gross profit margin, and adjusted EBITDA," said
"While our five-year strategy is still in its early days, we made substantial progress in fiscal 2026. We made significant investments in our footprint and brands, completing 13 new store openings, 2 additional relocations, 5 expansions, and refreshing 17 locations. We also closed 15 stores to sharpen our focus on more optimal locations. The opening of the RW&CO Saint–Bruno flagship marked an important step for the brand's elevated positioning, along with continued strong performance in menswear; Reitmans customers responded well to a continued shift in perception and the introduction of on–trend collections throughout the year; and PENN. introduced its new store experience sales model, which has since been rolled out across the entire chain."
"In fiscal 2027, RCL will continue to focus on disciplined execution, strengthening customer experience, and advancing its strategic investment in stores. Significantly, the Reitmans brand will open a new Carrefour Laval flagship location in
Selected Financial Information
|
(in millions of dollars, except for |
Fourth quarter |
Fiscal Year |
||||
|
2026 |
2025 |
Change |
2026 |
2025 |
Change |
|
|
Net revenues |
|
|
1.2 % |
|
|
0.4 % |
|
Gross profit |
|
|
7.2 % |
|
|
(0.1 %) |
|
Gross profit % |
54.9 % |
51.9 % |
300 bps |
55.9 % |
56.2 % |
(30 bps) |
|
Selling, general and administrative expenses |
|
|
0.3 % |
|
|
0.8 % |
|
Strategic transformation expenses |
|
- |
n/a |
|
- |
n/a |
|
Net (loss) earnings |
( |
( |
(16.7 %) |
( |
|
n/a |
|
Adjusted EBITDA1 |
|
( |
184.6 % |
|
|
(26.4 %) |
|
Earnings (loss) per share: |
|
|
|
|
|
|
|
Basic |
( |
( |
(25.0 %) |
( |
|
n/a |
|
Diluted |
( |
( |
(25.0 %) |
( |
|
n/a |
|
|
|
|
1 |
This is a Non-GAAP Financial Measure. See "Non-GAAP Financial Measures & Supplementary Financial Measures" for reconciliations of these measures. |
Fourth Quarter Overview
Net revenues increased by
Gross profit increased by
Adjusted EBITDA1 increased by
The Company incurred strategic transformation costs of
Net loss was
On
Conference Call
The Company will host a conference call on
A live audio webcast of the call will be available at https://www.reitmanscanadalimited.com/events-presentations.aspx?lang=en and will be available for replay at this website for 12 months.
About
For more information, visit www.reitmanscanadalimited.com.
Neither
For further information, please contact:
|
VP, Corporate Communications
Telephone: (514) 384-1140 Email: acohen@reitmans.com |
EVP & Chief Financial Officer
Telephone: (514) 384-1140 Email: cgoulian@reitmans.com |
NON-GAAP Financial Measures
This press release discusses the following non-GAAP financial measures: adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), and working capital. In the third quarter of 2026, the Company began excluding strategic transformation expenses from Adjusted EBITDA. This press release also indicates that Adjusted EBITDA as a percentage of net revenues is considered non-GAAP financial ratio. The intent of presenting Adjusted EBITDA is to provide additional useful information to investors and analysts.
Adjusted EBITDA is currently defined as net (loss) earnings before depreciation, amortization, net impairment of non-financial assets, interest expense, interest income, income tax expense/recovery, and adjusted for the impact of certain items, such as strategic transformation expenses, pension windup-related costs, contract termination costs and a deduction of interest expense and depreciation relating to leases accounted for under IFRS 16, Leases. The Company began excluding strategic transformation expense from Adjusted EBITDA in the third quarter of 2026. Management believes that Adjusted EBITDA is an important indicator of the Company's ability to generate liquidity through operating cash flow to fund working capital needs and fund capital expenditures and uses this metric for this purpose. Management believes that Adjusted EBITDA as a percentage of net revenues indicates how much liquidity is generated for each dollar of net revenues. The exclusion of interest income and expenses, other than interest expense related to lease liabilities as explained hereafter, eliminates the impact on earnings derived from non-operational activities. The exclusion of depreciation, amortization and net impairment losses, other than depreciation related to right-of-use assets as explained hereafter, eliminates the non-cash impact and the exclusion of strategic transformation expenses, pension windup-related costs, and contract termination costs adjust the results to better reflect the on-going business. Strategic transformation expenses, which consist of employee termination benefits and consulting fees, are adjusted as they represent specific expenses related to restructuring efforts to evolve the Company's operating structure as part of the implementation of the Company's five-year strategic plan. These expenses are limited to the project's timeframe and occur before any ongoing benefits are achieved. Adjusting such expenses can also be useful in assessing financial performance across periods on a comparable basis. Under IFRS 16, Leases, the characteristics of some leases result in lease payments being recognized in net earnings in the period in which the performance or use occurs while other leases are recorded as right-of-use assets with a corresponding lease liability recognized, which results in depreciation of those assets and interest expense from those liabilities. Management is presenting its Adjusted EBITDA to reflect the payments of its store and equipment lease obligations on a consistent basis. As such, the initial addback of depreciation of right-of-use assets and interest on lease obligations are removed from the calculation of Adjusted EBITDA, as this better reflects the operational cash flow impact of its leases.
Working capital is defined as current assets less current liabilities. Management believes that working capital provides information that is helpful to understand the financial condition of the Company. Due to the seasonality of the Company's business, it is more relevant to compare the working capital position at the same point in time.
Reconciliation of NON-GAAP Financial Measures
The tables below provide a reconciliation of net (loss) earnings to Adjusted EBITDA:
|
(in millions of dollars) |
Fourth quarter of |
Fiscal |
||
|
|
2026 |
2025 |
2026 |
2025 |
|
Net (loss) earnings |
( |
( |
( |
|
|
Depreciation, amortization and net |
4.4 |
3.5 |
16.7 |
14.4 |
|
Depreciation on right-of-use assets |
10.7 |
10.2 |
41.4 |
39.4 |
|
Interest expense on lease liabilities |
2.4 |
2.5 |
9.9 |
10.0 |
|
Interest income |
(1.1) |
(1.6) |
(4.1) |
(5.8) |
|
Income tax (recovery) expense |
(1.7) |
(2.0) |
(0.2) |
3.8 |
|
Strategic transformation expenses |
5.5 |
- |
7.0 |
- |
|
Pension windup-related costs |
- |
1.2 |
0.2 |
0.4 |
|
Contract termination costs1 |
- |
0.5 |
- |
0.5 |
|
Rent impact from IFRS 16, Leases2 |
(13.1) |
(12.7) |
(51.3) |
(49.4) |
|
Adjusted EBITDA |
|
( |
|
|
|
Adjusted EBITDA as % of Net Revenues |
1.1 % |
(1.3 %) |
2.4 % |
3.3 % |
|
1 |
Contract termination costs relate to one-time contract termination costs on discontinued projects recognized in selling, general and administrative expenses; |
|
2 |
Rent Impact from IFRS 16, Leases is comprised as follows: |
|
|
For the fourth quarter of |
Fiscal |
||
|
|
2026 |
2025 |
2026 |
2025 |
|
Depreciation on right-of-use assets |
|
|
|
|
|
Interest expense on lease liabilities |
2.4 |
2.5 |
9.9 |
10.0 |
|
Rent impact from IFRS 16, Leases |
|
|
|
|
Supplementary Financial Measures
The Company uses a key performance indicator ("KPI"), comparable sales, to assess store performance and sales growth. The Company engages in an omnichannel approach in connecting with its customers by appealing to their shopping habits through either online or store channels. This approach allows customers to shop online for home delivery or to pick up in store, purchase in any of our store locations or ship to home from another store when the products are unavailable in a particular store. Due to customer cross-channel behavior, the Company reports a single comparable sales metric, inclusive of store and e-commerce channels. Comparable sales are defined as net revenues generated by stores that have been continuously open during both of the periods being compared and include e-commerce net revenues. The comparable sales metric compares the same calendar days for each period. Although this KPI is expressed as a ratio, it is a supplementary financial measure that does not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures used by other companies. Management uses comparable sales in evaluating the performance of stores and online net revenues and considers it useful in helping to determine what portion of new net revenues sales has come from sales growth and what portion can be attributed to the opening of new stores. Comparable sales is a measure widely used amongst retailers and is considered useful information for both investors and analysts. Comparable sales should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS Accounting Standards.
Forward-Looking Statements
All of the statements contained herein, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond the Company's control and are based on several assumptions which give rise to the possibility that actual results could differ materially from the Company's expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved. Consequently, the Company cannot guarantee that any forward-looking statement will materialize, or if any of them do, what benefits the Company will derive from them. Forward-looking statements are provided in this press release for the purpose of allowing investors and others to get a better understanding of the Company's operating environment and management's expectations and plans as of the date of this press release. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose. Forward-looking statements are based upon the Company's current estimates, beliefs and assumptions, which are based on management's perception of historical trends, current conditions and currently expected future developments, as well as other factors it believes, are appropriate in the circumstances.
This press release contains forward-looking statements about the Company's objectives, plans, goals, expectations, aspirations, strategies, financial condition, results of operations, cash flows, performance, and prospects, opportunities and legal and regulatory matters. Specific forward-looking statements in this press release include, but are not limited to, statements with respect to the Company's belief in its strategies and its brands and their capacity to generate long-term profitable growth, plans to meet certain financial objectives, future liquidity, planned capital expenditures, status and impact of systems implementation, the ability of the Company to successfully implement its strategic initiatives and cost reduction and productivity improvement initiatives as well as the impact of such initiatives. These specific forward-looking statements are contained throughout this press release and the Company's Management Discussion & Analysis ("MD&A") including those listed in the "Risk and Uncertainties " section of the MD&A. Forward-looking statements are typically identified by words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "strive", "will", "may" and "should" and similar expressions, as they relate to the Company and its management. Forward-looking statements are based on information currently available to management and on estimates and assumptions, including assumptions about future economic conditions and courses of action. Examples of material estimates and assumptions and beliefs made by management in preparing such forward looking statements: management's belief in its strategies and its brands and their capacity to generate long-term profitable growth, significant sales growth in RW&Co. both in stores and online, increased market share for both Reitmans and PENN., stability in the current market environment, changes in laws, rules, regulations and global standards, the Company's competitive position in its industry, the Company's ability to keep pace with changing consumer preferences, the absence of public health related restrictions impacting client shopping patterns or incremental direct costs related to health and safety measures, the Company's ability to execute on its capital expenditure plan, including at its distribution centre in
Numerous risks and uncertainties could cause the Company's actual results to differ materially from those expressed, implied or projected in the forward-looking statements. Please refer to the "Risk and Uncertainties" section of the Company's MD&A for fiscal 2026.
The reader should not place undue reliance on any forward-looking statements included herein. These statements speak only as of the date made and the Company is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, except to the extent required under applicable securities law.
The Company's complete financial statements including notes and the Company's MD&A for fiscal 2026 are available online at www.sedarplus.ca.
|
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (in thousands of Canadian dollars except per share amounts) |
||||||
|
|
||||||
|
|
|
For the 13 weeks
|
For the 13 weeks
|
For the 52 weeks
|
For the 52 weeks
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ 207,171 |
$ 204,844 |
$ 776,846 |
$ 773,804 |
|
|
Cost of goods sold |
|
93,412 |
98,630 |
342,298 |
338,766 |
|
|
Gross profit |
|
113,759 |
106,214 |
434,548 |
435,038 |
|
|
Selling, general and administrative expenses |
|
112,919 |
112,568 |
420,775 |
417,198 |
|
|
Strategic transformation expenses |
|
5,517 |
- |
6,962 |
- |
|
|
Results from operating activities |
|
(4,677) |
(6,354) |
6,811 |
17,840 |
|
|
|
|
|
|
|
|
|
|
Finance income |
|
1,007 |
2,695 |
4,052 |
8,024 |
|
|
Finance costs |
|
(2,961) |
(2,498) |
(11,955) |
(9,963) |
|
|
(Loss) earnings before income taxes |
|
(6,631) |
(6,157) |
(1,092) |
15,901 |
|
|
|
|
|
|
|
|
|
|
Income tax recovery (expense) |
|
1,723 |
1,988 |
176 |
(3,762) |
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings |
|
$ (4,908) |
$ (4,169) |
$ (916) |
$ 12,139 |
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per share: |
|
|
|
|
|
|
|
Basic |
|
$ (0.10) |
$ (0.08) |
$ (0.02) |
$ 0.25 |
|
|
Diluted |
|
(0.10) |
(0.08) |
(0.02) |
0.24 |
|
|
|
|||
|
CONSOLIDATED BALANCE SHEETS
As at (Unaudited) (in thousands of Canadian dollars) |
|||
|
|
2026 |
2025 |
|
|
ASSETS |
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Cash |
|
|
$ 158,116 |
|
Trade and other receivables |
|
6,864 |
6,088 |
|
Derivative financial asset |
|
178 |
12,286 |
|
Income taxes recoverable |
|
304 |
- |
|
Inventories |
|
110,187 |
132,877 |
|
Prepaid expenses and other assets |
|
11,748 |
12,714 |
|
Total Current Assets |
|
280,237 |
322,081 |
|
|
|
|
|
|
NON-CURRENT ASSETS |
|
|
|
|
Property and equipment |
|
100,190 |
89,126 |
|
Intangible assets |
|
6,565 |
1,639 |
|
Right-of-use assets |
|
141,432 |
140,120 |
|
Deferred income taxes |
|
25,036 |
21,120 |
|
Total Non-Current Assets |
|
273,223 |
252,005 |
|
|
|
|
|
|
TOTAL ASSETS |
|
|
$ 574,086 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Trade and other payables |
|
$ 87,750 |
$ 109,671 |
|
Deferred financial liability |
|
3,934 |
- |
|
Deferred revenue |
|
13,393 |
12,398 |
|
Income taxes payable |
|
- |
191 |
|
Current portion of lease liabilities |
|
37,943 |
34,145 |
|
Total Current Liabilities |
|
143,020 |
156,405 |
|
|
|
|
|
|
NON-CURRENT LIABILITIES |
|
|
|
|
Other non-trade payables |
|
316 |
- |
|
Lease liabilities |
|
123,603 |
121,252 |
|
Total Non-Current Liabilities |
|
123,919 |
121,252 |
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
Share capital |
|
31,106 |
29,108 |
|
Contributed surplus |
|
11,233 |
11,456 |
|
Retained earnings |
|
246,576 |
248,012 |
|
Accumulated other comprehensive (loss) income |
|
(2,394) |
7,853 |
|
Total Shareholders' Equity |
|
286,521 |
296,429 |
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
$ 574,086 |
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of Canadian dollars) |
||||||
|
|
For the 13
|
For the 13
|
For the 52
|
For the 52
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
Net (loss) earnings |
|
$ (4,908) |
$ (4,169) |
$ (916) |
$ 12,139 |
|
|
Adjustments for: |
|
|
|
|
|
|
|
Depreciation, amortization and net impairment losses on |
|
4,343 |
3,471 |
16,680 |
14,378 |
|
|
Depreciation on right-of-use assets |
|
10,710 |
10,181 |
41,430 |
39,364 |
|
|
Share-based compensation costs |
|
139 |
130 |
740 |
516 |
|
|
Net change in transfer of realized gain on cash flow hedges to |
|
1,211 |
(1,189) |
2,102 |
(1,379) |
|
|
Foreign exchange gain |
|
(346) |
(3,874) |
(3,876) |
(8,361) |
|
|
Interest on lease liabilities |
|
2,445 |
2,498 |
9,942 |
9,963 |
|
|
Interest income |
|
(1,007) |
(1,553) |
(4,052) |
(5,783) |
|
|
Income tax (recovery) expense |
|
(1,723) |
(1,988) |
(176) |
3,762 |
|
|
|
|
10,864 |
3,507 |
61,874 |
64,599 |
|
|
Changes in: |
|
|
|
|
|
|
|
Trade and other receivables |
|
1,217 |
479 |
(927) |
(2,744) |
|
|
Inventories |
|
19,416 |
8,428 |
22,690 |
(10,852) |
|
|
Prepaid expenses and other assets |
|
1,823 |
4,671 |
966 |
3,627 |
|
|
Trade and other payables |
|
12,550 |
27,501 |
(17,636) |
42,991 |
|
|
Pension asset |
|
- |
1,402 |
- |
712 |
|
|
Deferred revenue |
|
2,939 |
2,482 |
995 |
459 |
|
|
|
|
48,809 |
48,470 |
67,962 |
98,792 |
|
|
Interest received |
|
941 |
1,553 |
4,203 |
5,981 |
|
|
Income taxes paid |
|
(425) |
(419) |
(542) |
(516) |
|
|
Net cash flows from operating activities |
|
49,325 |
49,604 |
71,623 |
104,257 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS USED IN INVESTING ACTIVITIES |
|
|
|
|
|
|
|
Additions to property and equipment and intangible assets |
|
(6,068) |
(11,124) |
(37,023) |
(31,193) |
|
|
Cash flows used in investing activities |
|
(6,068) |
(11,124) |
(37,023) |
(31,193) |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS USED IN FINANCING ACTIVITIES |
|
|
|
|
|
|
|
Payment of lease liabilities |
|
(11,844) |
(7,394) |
(46,432) |
(40,254) |
|
|
Purchase of Class A non-voting shares for cancellation |
|
(74) |
(238) |
(718) |
(464) |
|
|
Proceeds from issuance of share capital |
|
- |
283 |
1,617 |
691 |
|
|
Cash flows used in financing activities |
|
(11,918) |
(7,349) |
(45,533) |
(40,027) |
|
|
|
|
|
|
|
|
|
|
FOREIGN EXCHANGE GAIN ON CASH HELD IN FOREIGN CURRENCY |
|
220 |
3,912 |
3,773 |
8,426 |
|
|
|
|
|
|
|
|
|
|
NET (DECREASE) INCREASE IN CASH |
|
31,559 |
35,043 |
(7,160) |
41,463 |
|
|
|
|
|
|
|
|
|
|
CASH, BEGINNING OF THE PERIOD |
|
119,397 |
123,073 |
158,116 |
116,653 |
|
|
|
|
|
|
|
|
|
|
CASH, END OF THE PERIOD |
|
$ 150,956 |
$ 158,116 |
$ 150,956 |
$ 158,116 |
|
SOURCE
