Reitmans (Canada) Limited

Second-quarter net revenues were $211.8 million, down 1.9% year over year, and comparable sales declined 1.5%. Gross profit increased $1.1 million to $123.9 million, and gross margin improved 160 basis points to 58.5% of net revenues. Adjusted EBITDA was $18.8 million versus $21.4 million last year; net earnings were $10.1 million, or $0.20 per share, compared with $13.1 million, or $0.26 per share. For the year to date, adjusted EBITDA is up $2.7 million, or 25%, and net earnings are up $700 thousand, or 22.6%, versus last year. Guidance was qualitative rather than numeric: management said higher fuel costs and freight pressures are expected to continue in the near term, and it remains difficult to predict how long those costs will stay elevated.

Andrea Limbardi emphasized that the company is improving the business through better pricing discipline, less promotional activity, and tighter inventory management, which drove the gross margin gain. She highlighted stronger performance from renovated flagship stores, including double-digit sales gains at Carrefour Laval and Toronto Eaton Centre, and said recent brand campaigns and partnerships are helping Reitmans’ relevance and customer appeal. Her tone was constructive and focused on building a more resilient, longer-term business despite near-term cost pressures.

Caroline Goulian said the quarter’s revenue softness came from lower transaction volume and reduced clearance activity, but gross profit still rose to $123.9 million and gross margin improved to 58.5%. SG&A increased by $4.5 million, including $1.6 million higher store-related rent and occupancy costs, $2.1 million more in advertising and freight, and $1.2 million in project spending tied to loyalty and digital work, partly offset by a $400 thousand wage decrease from workforce reduction. She also cited $1.1 million of strategic transformation expenses, $149.2 million of working capital, $152.7 million of cash, $119.7 million of inventory down 5.2% year over year, no long-term debt beyond lease liabilities, and $600 thousand returned through share repurchases under the NCIB.

There were no analyst questions on the call, so no management Q&A was provided. The only additional color came from management’s closing commentary that higher fuel and freight costs remain a near-term challenge and that the duration of those pressures is uncertain. Management also reiterated that it will continue advancing strategic priorities such as loyalty, digital improvement, and store concept upgrades.