Reitmans (Canada) Limited Reports Fourth Quarter and Fiscal 2025 Financial Results

Proudly Canadian retailer plans to reach $1 billion in annual net revenues by the end of fiscal 2030¹

MONTREAL, April 10, 2025 /CNW/ - Reitmans (Canada) Limited ("RCL" or the "Company") (TSXV: RET) (TSXV: RET-A), one of Canada's leading specialty apparel retailers, today reported its financial results for the fourth quarter and year ended February 1, 2025. Unless otherwise indicated, all comparisons are to the fourth quarter and year ended February 3, 2024, results of which are inclusive of an additional week compared to the corresponding periods in fiscal 2025 due to the Company's floating year end. All dollar amounts are in Canadian currency.

Highlights

• When excluding the 53^rd week of the prior year, net revenues decreased 1.4% to $773.8 million for the year and 2.9% to $204.8 million for the quarter.
• Comparable sales², which include e-commerce net revenues, decreased 0.6% for the year and were essentially flat for the quarter.
• Gross profit % was up 200 basis points to 56.2% for the year and flat for the quarter at 51.9%.
• Adjusted EBITDA² decreased $3.8 million to $25.4 million for the year and was a loss of $2.6 million for the quarter.
• Net earnings decreased $2.7 million to $12.1 million for the year and was a loss of $4.2 million for the quarter.

"This past holiday season, we had one of our strongest ever Black Friday and Cyber Monday performance, as well as a very good lead-up to Christmas and Boxing Week," said Andrea Limbardi, President and CEO of RCL. "The success of those shopping events largely offset the impact of warmer weather in the first half of the quarter, which delayed consumers transitioning to winter apparel. Overall, our brands remained on point with Reitmans growth as a gifting destination and menswear at RW&CO continuing to perform very well as it had all year, aligned with our respective strategies."

"We accomplished a lot in fiscal 2025. We continued to innovate and evolve our supply chain operations, replacing existing sorters in our Montreal distribution centre with the SORTRAK^© Inventory Systems to streamline our store inventory management. We're pleased to share that the implementation was successful and has been completed. We also made the strategic decision to streamline our operations by closing Thyme Maternity and RCL Market in January of 2025. Finally, we finished the year with a remarkably strong balance sheet, including a significant cash position, very healthy inventory level, and no debt."

"Looking ahead, RCL is primed to expand and optimize our store footprint. We've recently finalized our new five-year strategy focused on profitably driving accelerated brand growth, fueling growth with modernization, and igniting high performance. We expect to reinvest over $100 million over the next five years on capital projects focused on growth¹. Our ambition is to reach $1 billion in annual net revenue with Adjusted EBITDA¹ to grow to $60-70 million by the end of fiscal 2030¹. We have three unique brands, each with their own unique value propositions, and our objective is to amplify the power of our brands to deliver on-trend fashion that Canadians will love, for years to come."

^1	See "Forward-Looking Statements".
^2	This is a Non-GAAP Financial Measure. See "Non-GAAP Financial Measures & Supplementary Financial Measures" for reconciliation of these measures.

Selected Financial Information

(in millions of dollars, except for gross profit % and earnings per share) (unaudited)	Fourth quarter			Fiscal Year
	2025	2024	Change	2025	2024	Change
Net revenues	$204.8	$221.0	(7.3 %)	$773.8	$794.7	(2.6 %)
Gross profit	$106.2	$114.9	(7.6 %)	$435.0	$431.0	0.9 %
Gross profit %	51.9 %	52.0 %	(10 bps)	56.2 %	54.2 %	200 bps
Selling, general and administrative expenses^2	$112.6	$114.4	(1.6 %)	$417.2	$408.1	2.2 %
Net (loss) earnings	($4.2)	$0.0	-	$12.1	$14.8	(18.2 %)
Adjusted EBITDA^1	($2.6)	$1.7	-	$25.4	$29.2	(13.0 %)
Earnings (loss) per share:
Basic	($0.08)	$0.00	-	$0.25	$0.30	(16.7 %)
Diluted	($0.08)	$0.00	-	$0.24	$0.30	(20.0 %)

^1	This is a Non-GAAP Financial Measure. See "Non-GAAP Financial Measures & Supplementary Financial Measures" for reconciliations of these measures.
^2	In order to align to presentation in the industry, previously captioned selling, distribution and administrative expenses for fiscal 2024 are now captioned as selling, general and administrative expenses.

On February 1, 2025, RCL had working capital¹ of $165.7 million, including cash of $158.1 million compared to working capital of $154.4 million, including cash of $116.7 million at the prior year end. As at February 1, 2025 and February 3, 2024, RCL had no long-term debt other than lease liabilities and no amounts were drawn under the Company's bank credit facilities.

Fourth Quarter Overview

Net revenues decreased by $16.2 million, or 7.3%, to $204.8 million, primarily due to the inclusion of an extra week in the fourth quarter a year earlier and a lower store count year-over-year. Comparable sales¹, which include e-commerce net revenues, decreased 0.2%, primarily due to unseasonably warm weather in the first half of the quarter delaying sales of winter apparel.

Gross profit decreased by $8.7 million to $106.2 million, primarily due to one less week of revenue contribution. Gross profit as a percentage of net revenues was 51.9%, which was essentially flat compared to the same quarter in the prior year.

Adjusted EBITDA¹ decreased by $4.3 million to a loss of $2.6 million. The decrease was largely due to lower gross profit and higher occupancy costs as many previously preferential rent arrangements have been renewed at closer to market lease rates, and higher performance incentive plan expense.

Net loss was $4.2 million compared to nil in the fourth quarter of the prior year.

Conference Call

The Company will host a conference call on April 11, 2025, at 8:30 am Eastern Time to discuss its fourth quarter and full year financial results. Interested parties may join the conference call by dialing 1-844-763-8274 or 647-484-8814 approximately 15 minutes prior to the call to secure a line.

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.

Granting of Options to Management

On April 10, 2025, the Company granted an aggregate of 25,000 options to purchase Class A non-voting shares of the Company (the "Options") to a member of management pursuant to its second amended and restated share option plan dated April 19, 2021, as amended. The Options have an exercise price of $2.03 and are subject to time-based vesting terms and have an expiry date of May 10, 2028. The grant of the Options is made pursuant to the Company's Long-Term Incentive Plan which is designed to incentivize members of management in the achievement of long-term financial targets.

About Reitmans (Canada) Limited

Reitmans (Canada) Limited is one of Canada's leading specialty apparel retailers for women and men, with retail outlets throughout the country. The Company operates 390 stores under three distinct banners consisting of 222 Reitmans, 86 PENN. Penningtons, and 82 RW&CO.

For more information, visit www.reitmanscanadalimited.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information, please contact:

NON-GAAP Financial Measures & Supplementary Financial Measures

This press release makes reference to certain non-GAAP financial measures. These financial measures are not recognized measures under International Financial Reporting Standards ("IFRS") and do not have a standardized meaning prescribed by IFRS. They are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for the Company's analysis of its financial information reported under IFRS.

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. This press release also indicates Adjusted EBITDA as a percentage of net revenues and is less discounts and returns ("net sales") and includes shipping fees charged to customers on e-commerce orders. Adjusted EBITDA is currently defined as net earnings before depreciation, amortization, net impairment of non-financial assets, interest expense, interest income, income tax expense/recovery,  net pension settlement costs, contract termination costs, loss on foreign currency translation differences reclassified to net earnings, pension curtailment gain, and adjusted for the impact of certain items, including a deduction of interest expense and depreciation relating to leases accounted for under IFRS 16, Leases. 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 net pension settlement costs, contract termination costs, loss on foreign currency translation differences reclassified to net earnings and pension curtailment gain presents the results of the on-going business. 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 add-back of depreciation of right-of-use assets and interest on lease obligations are removed from the calculation of Adjusted EDITDA, 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 Measures

The tables below provide a reconciliation of net earnings to Adjusted EBITDA:

(in millions of dollars)	Fourth quarter of		Fiscal
	2025	2024	2025	2024
Net (loss) earnings	$(4.2)	$0.0	$12.1	$14.8
Depreciation, amortization and net     impairment losses on property and     equipment, and intangible assets	3.5	3.9	14.4	14.2
Depreciation on right-of-use assets	10.2	9.9	39.4	34.3
Interest expense on lease liabilities	2.5	2.4	10.0	7.6
Interest income	(1.6)	(1.9)	(5.8)	(5.2)
Income tax (recovery) expense	(2.0)	(0.3)	3.8	5.3
Net pension settlement costs^1	1.2	-	0.4	-
Contract termination costs^2	0.5	-	0.5	-
Loss on foreign currency translation     differences reclassified to net earnings	-	-	-	1.0
Pension curtailment gain	-	-	-	(0.9)
Rent impact from IFRS 16, Leases^3	(12.7)	(12.3)	(49.4)	(41.9)
Adjusted EBITDA	$(2.6)	$1.7	$25.4	$29.2
Adjusted EBITDA as % of Net Revenues	(1.3 %)	0.8 %	3.3 %	3.7 %

^1	Net pension settlement costs represent a settlement loss of $0.8 million and windup-related administration costs of $0.4 million for the fourth quarter of 2025; windup-related administration costs of $0.4 million for fiscal 2025.
^2	Contract termination costs relate to one-time contract termination costs on discontinued projects recognized in selling, general and administrative expenses;
^3	Rent Impact from IFRS 16, Leases is comprised as follows:

	For the fourth quarter of			Fiscal
	2025	2024		2025		2024
Depreciation on right-of-use assets	$10.2	$9.9		$39.4		$34.3
Interest expense on lease liabilities	2.5	2.4		10.0		7.6
Rent impact from IFRS 16, Leases	$12.7	$12.3		$49.4		$41.9

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 behaviour, the Company reports a single comparable sales metric, inclusive of store and e-commerce channels. Comparable sales are defined as net sales generated by stores that have been continuously open during both of the periods being compared and include e-commerce net sales. 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 sales and considers it useful in helping to determine what portion of new net 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.

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. Specific forward-looking statements in this press release include, but are not limited to, statements with respect to the Company's plans to meet certain financial objectives, future liquidity, planned capital expenditures, amount of pension plan contributions, 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 "Operating and Financial Risk Management" 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 Montreal, and the Company's ability to retain and recruit exceptional talent.

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 "Forward-Looking Statements" section of the Company's MD&A for fiscal 2025.

This is not an exhaustive list of the factors that may affect the Company's forward-looking statements. Other risks and uncertainties not presently known to the Company or that the Company presently believes are not material could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time. 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 2025 are available online at www.sedarplus.ca.

REITMANS (CANADA) LIMITED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (in thousands of Canadian dollars except per share amounts)
		For the 13 weeks ended February 1, 2025	For the 14 weeks ended February 3, 2024	For the 52 weeks ended February 1, 2025	For the 53 weeks ended February 3, 2024
Net revenues		$  204,844	$  220,984	$  773,804	$  794,688
Cost of goods sold		98,630	106,072	338,766	363,684
Gross profit		106,214	114,912	435,038	431,004
Selling, general and administrative     expenses		112,568	114,408	417,198	408,079
Results from operating activities		(6,354)	504	17,840	22,925
Finance income		2,695	1,872	8,024	5,820
Finance costs		(2,498)	(2,628)	(9,963)	(8,606)
(Loss) earnings before income taxes		(6,157)	(252)	15,901	20,139
Income tax recovery (expense)		1,988	239	(3,792)	(5,324)
Net (loss) earnings		$     (4,169)	$           (13)	$     12,139	$     14,815
(Loss) earnings per share:
Basic		$      (0.08)	$      (0.00)	$       0.25	$       0.30
Diluted		(0.08)	(0.00)	0.24	0.30

REITMANS (CANADA) LIMITED CONSOLIDATED BALANCE SHEETS As at February 1, 2025 and February 3, 2024 (in thousands of Canadian dollars)
		2025	2024
ASSETS
CURRENT ASSETS
Cash		$    158,116	$    116,653
Trade and other receivables		6,088	3,542
Derivative financial asset		12,286	1,382
Inventories		132,877	122,025
Prepaid expenses and other assets		12,714	16,341
Total Current Assets		322,081	259,943
NON-CURRENT ASSETS
Property and equipment		89,126	69,609
Intangible assets		1,639	1,566
Right-of-use assets		140,120	131,457
Pension asset		-	1,149
Deferred income taxes		21,120	27,026
Total Non-Current Assets		252,005	230,807
TOTAL ASSETS		$    574,086	$    490,750
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade and other payables		$    109,671	$       61,754
Deferred revenue		12,398	11,939
Income taxes payable		191	445
Current portion of lease liabilities		34,145	31,329
Total Current Liabilities		156,405	105,467
NON-CURRENT LIABILITIES
Lease liabilities		121,252	106,265
Total Non-Current Liabilities		121,252	106,265
SHAREHOLDERS' EQUITY
Share capital		29,108	28,292
Contributed surplus		11,456	11,207
Retained earnings		248,012	238,668
Accumulated other comprehensive income		7,853	851
Total Shareholders' Equity		296,429	279,018
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$    574,086	$    490,750

REITMANS (CANADA) LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands of Canadian dollars)
		For the 13 weeks ended February 1, 2025	For the 14 weeks ended February 3, 2024	For the 52 weeks ended February 1, 2025	For the 53 weeks ended February 3, 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) earnings		$       (4,169)	$             (13)	$      12,139	$      14,815
Adjustments for:
Depreciation, amortization and net impairment losses on     property and equipment and intangible assets		3,471	3,907	14,378	14,203
Depreciation on right-of-use assets		10,181	9,884	39,364	34,314
Share-based compensation costs		130	103	516	579
Net change in transfer of realized gain on cash flow hedges to     inventory		(1,189)	(80)	(1,379)	(224)
Foreign exchange gain		(3,874)	(173)	(8,361)	(1,714)
Loss on foreign currency translation differences reclassified     to net earnings		-	-	-	1,044
Interest on lease liabilities		2,498	2,401	9,963	7,562
Interest income		(1,553)	(1,872)	(5,783)	(5,200)
Income tax (recovery) expense		(1,988)	(239)	3,762	5,324
		3,507	13,918	64,599	70,703
Changes in:
Trade and other receivables		479	555	(2,744)	126
Inventories		8,428	25,880	(10,852)	20,277
Prepaid expenses and other assets		4,671	(502)	3,627	(1,839)
Trade and other payables		27,501	(2,373)	42,991	(20,539)
Pension asset		1,402	108	712	(795)
Deferred revenue		2,482	342	459	(2,161)
		48,470	37,928	98,792	65,772
Interest received		1,553	1,494	5,981	4,773
Income taxes paid		(419)	(425)	(516)	(1,017)
Net cash flows from operating activities		49,604	38,997	104,257	69,528
CASH FLOWS USED IN INVESTING ACTIVITIES
Additions to property and equipment and intangible assets		(11,124)	(8,835)	(31,193)	(17,702)
Cash flows used in investing activities		(11,124)	(8,835)	(31,193)	(17,702)
CASH FLOWS USED IN FINANCING ACTIVITIES
Release of restricted cash		-	-	-	2,808
Payment of lease liabilities		(7,394)	(14,904)	(40,254)	(43,352)
Purchase of Class A non-voting shares for cancellation		(238)	-	(464)	-
Proceeds from issuance of share capital		283	-	691	643
Cash flows used in financing activities		(7,349)	(14,904)	(40,027)	(39,901)
FOREIGN EXCHANGE GAIN ON CASH HELD IN FOREIGN CURRENCY		3,912	120	8,426	1,724
NET INCREASE IN CASH		35,043	15,378	41,463	13,649
CASH, BEGINNING OF THE PERIOD		123,073	101,275	116,653	103,004
CASH, END OF THE PERIOD		$   158,116	$   116,653	$   158,116	$   116,653

SOURCE Reitmans (Canada) Ltd

For further information, please contact: Alexandra Cohen, VP, Corporate Communications, Reitmans (Canada) Limited, Telephone: [phone] ext 23737, Email: [email protected]; Caroline Goulian, Chief Financial Officer, Reitmans (Canada) Limited, Telephone: [phone], Email: [email protected]