A Roots storefront in Toronto in 2017. The clothing retailer posted third-quarter profit of around $2.3-million, down 4.5 per cent from a year ago.Chris Young/The Canadian Press
The bargain-seeking behaviour many Canadians adopted because of the pandemic-driven inflation surge hasn’t gone away.
Roots Corp.’s ROOT-T chief executive Meghan Roach said Wednesday that holiday shoppers are still prioritizing uniqueness and deals.
“That’s been a trend we’ve seen for the last number of years also,” she told analysts on a call. “I think fundamentally the consumer is ... continuing to reflect the current economic reality.”
Roach’s remarks come as the holiday shopping season is in full swing while tariff threats loom large and rising costs pummel the average household budget.
Economists and retailers like Roots will watch spending this season closely to get a sense of just how resilient Canadians are in the face of these challenges.
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So far, Roach said consumer behaviour is being tinged by the economic environment but the average Roots customer “continues to be strong.”
Many of these shoppers have also been shopping more in earlier November, she said, because Black Friday has moved from being a single day or week of sales to a month-long extravaganza.
Roach shared such insights just after Roots revealed its third-quarter net income dropped slightly from last year as its sales climbed by about seven per cent.
Its third-quarter net income totalled almost $2.3-million, down 4.5 per cent from $2.4-million a year ago.
The result for the period ended Nov. 1 amounted to six cents per share, the same as it was a year earlier.
Third-quarter sales reached $71.5-million, up nearly seven per cent from $66.9-million a year ago.
The increase came as direct-to-consumer sales, which include corporate retail store and e-commerce sales, totalled $56.8-million, up 4.8 per cent from the year before. Direct-to-consumer comparable sales growth was 6.3 per cent.
The quarter saw Roots contend with a “dynamic” retail environment and an unusually warm fall.
When the weather does not follow its usual patterns, retailers can often see a change in how early or late shoppers make purchases for the upcoming season, shifting sales forward or backward from their expected cadence.
Roots spent the quarter focusing on store openings, a University of Toronto partnership and more marketing. Just after the quarter ended, it debuted a new advertising campaign featuring actor Seth Rogen.