Reitmans (Canada) Limited

For Q1 ended May 3, 2025, net revenues were $158.9 million, down 4.1% from $165.7 million a year ago. Comparable sales decreased 4.5%, while e-commerce revenue increased 1%. Gross profit was $88.5 million, down $5.4 million, and gross margin fell 100 basis points to 55.7%. Adjusted EBITDA was a loss of $10.6 million versus positive $900,000 last year, and net loss widened to $10 million, or $0.20 per share, from a loss of $1.5 million, or $0.03 per share. Looking ahead, management did not provide quarterly or annual financial guidance, but reiterated its fiscal 2030 ambition of $1 billion in annual revenue and adjusted EBITDA of $60 million to $70 million, with about $100 million of investment over five years.

CEO Andrea Limbardi said the quarter was pressured by near-record snowfall, lower February traffic and cautious consumers affected by tariff-related uncertainty. She emphasized that Reitmans’ value proposition resonated, especially at the Reitmans brand, but that this was not enough to offset weaker store traffic and deal-seeking behavior. Strategically, she framed the 5-year plan as the path to more resilient long-term growth, highlighting store expansion, renovations and a new digital roadmap that includes a Shopify migration.

CFO Caroline Goulian detailed the financial pressure from lower traffic and weaker margin mix: gross profit fell to $88.5 million, gross margin was 55.7%, and adjusted EBITDA swung to a $10.6 million loss. She said SG&A increased 4.2%, driven mainly by a $1.9 million rise in occupancy costs and an $800,000 increase in in-store personnel costs. She also noted working capital of $134.8 million, including $85.4 million in cash and $135 million in inventory, with no long-term debt other than lease liabilities and no borrowings on the bank credit facilities. On capital allocation, she said the company purchased 136,300 shares in the quarter for $300,000 and has bought back 318,200 shares since the NCIB began, returning $800,000 to shareholders, while planning to renew the bid for another 12 months.

The main analyst challenge was whether store growth is truly the answer given the weaker quarter and rising SG&A, plus a question about whether management was being cost-conscious. Andrea Limbardi responded that recent store openings and renovations are performing very well versus the rest of the fleet, but she agreed SG&A is an area of opportunity and said the company is doing a deep dive to improve productivity and reduce those costs. The analyst also raised shareholder and governance concerns, including board engagement and the dual-share structure; management said shareholder engagement is a priority and that the company will continue improving communications.