Roots reports first-quarter loss despite sales boost

Canadian retailer Roots Corp. reported on Wednesday strong sales for the first quarter of its fiscal year, but still saw a quarterly loss.
 
Roots reports loss in Q1 despite sales boost - Facebook: Roots Canada

Total sales for the quarter, ended May 5, 2018, increased 5.8 percent to $51 million.
 
Sales in the DTC segment including corporate retail store and e-commerce sales were up 9 percent to $44.2 million, compared to $40.5 million in the first-quarter 2017, largely driven by comparable sales growth of 6.4 percent. 
 
Sales in the 'partners and other' segment were, however, down at $6.9 million, dropping 11 percent. 
 
“Our top-line improvements reflect retail store and e-commerce sales growth, highlighting the strength of our brand, the consumers' response to our new products and our success in leveraging our position as a leading omni-channel retailer. We also benefitted from the strategic expansion of our retail footprint,” explained Jim Gabel, President and Chief Executive Officer of Roots.
 
Still, Roots said that both DTC sales and comparable sales growth for the quarter could have been even higher, had the company not faced a major ice storm across approximately 80 percent of its store network during a primary marketing and consumer event.
 
The loss for the quarter amounted to $5.6 million, or $0.13 per share, compared to last year’s loss of $5.1 million, or 12 cents per share.
 
Its adjusted net loss was $4.5 million, or 11 cents per share, compared with $3.6 million or nine cents per share a year ago.
 
Still, Roots says it is on track to reach its full-year target. By the end of fiscal 2019, the Canadian company expects sales of $410 million to $450 million, adjusted EBITDA of $61 million to $68 million and adjusted Net Income of $35 million to $40 million.
 
During the quarter, Roots opened two new corporate retail stores and renovated one store in North America, ending the quarter with 120 stores. 
 
The company is currently focused on opening new locations in the U.S. and will open 10 to 14 new American locations during the year.  

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