Roots posts decline in Q3 sales and profit

Total third quarter sales at Canadian label Roots decreased 9 percent to 63.5 million Canadian dollars.

The company’s DTC sales of 52.2 million Canadian dollars, were down 8.2 percent, while P&O sales amounted to 11.3 million Canadian dollars, down 12.3 percent.

Gross profit for the quarter dropped to 37.1 million Canadian dollars, a decline of 5.9 percent and gross margin was 58.4 percent, up 190 bps. Net income declined to 0.5 million Canadian dollars or 1 cent per share and adjusted EBITDA amounted to 5.5 million Canadian dollars.

"The prevailing economic headwinds have altered consumer spending patterns and in the third quarter, we maintained a promotional discipline which influenced our off-price sales dynamics," said Meghan Roach, president & CEO of Roots in a statement.

For the nine month period, sales amounted to 154.4 million Canadian dollars, representing a decline in sales of 3.9 percent. The company’s DTC sales decreased 6 percent to 124.7 million dollars, while P&O sales increased by 6.3 percent to 29.7 million dollars.

Gross profit for the period was down to 89 million Canadian dollars or 57.7 percent of sales, and net loss widened to 12.8 million Canadian dollars or loss of 31 cents per share. Adjusted EBITDA was negative 3.3 million Canadian dollars.