Clothing retailer Roots reports nearly $9.7M Q2 loss, falls short of expectations
The storefront of a Roots location in Toronto is pictured on September 14 , 2017. (THE CANADIAN PRESS/Chris Young)
TORONTO -- Roots Corp. lost nearly $9.7 million in its latest quarter, the clothing retailer said Wednesday as it missed expectations and said it will fall short of its financial guidance for the year.
The company said its second-quarter loss amounted to 23 cents per share for the 13-week period ended Aug. 3 compared with a loss of nearly $4.1 million or 10 cents per share a year earlier.
On an adjusted basis, Roots says it lost 15 cents per share compared with an adjusted loss of six cents per share in the same quarter last year.
Analysts on average had expected a loss of 11 cents per share, according to financial markets data firm Refinitiv.
Overall sales totalled nearly $61.7 million for the quarter, up from nearly $60.2 million in the same quarter last year.
However, comparable sales fell 2.9 per cent due to a drop in store traffic and a delay in the flow of product to stores, due to a transition to a new distribution centre.
That was partially offset by better than expected e-commerce sales and benefits from store relocations and renovations.
In its outlook, Roots said it expects sales for its 2019 financial year to be at the low end, or fall slightly below, its previously disclosed target range of $358 million to $375 million.
The company also says its adjusted earnings before interest, taxes, depreciation and amoritzation and its adjusted net income will fall short of its previous estimates of $46 million to $50 million and $20 million to $24 million, respectively.
Chief executive Jim Gabel said the second-quarter results fell below the company's expectations but the current quarter looks better.
"We are pleased with the improving trends we have seen moving into Q3," Gabel said in a statement.
"We entered the quarter with a more seasonally appropriate offering and consumers are responding well to our back-to-school assortment."