Womenswear retailer Reitmans Canada Ltd. (TSX:RET.A) has reported a decline in second-quarter earnings despite an improvement in sales, saying the bottom line was hurt by a decline in the value of the Canadian dollar against the U.S. greenback, which increased the cost of goods sold.
The Montreal-based operator of such banners as Reitmans, Penningtons, Smart Set and others says net income in the three months ended Aug. 2 was $9.6 million or 15 cents per diluted share, down from $10.2 million or 16 cents per share in the same year-earlier period.
Sales revenue was $258.3 million, up 1.9 per cent from $153.4 million despite a net reduction of 55 stores year over year, with sales improving in most banners as consumers "responded well to rebranding efforrts and new product offerings."
Same store sales increased 4.6 per cent excluding e-commerce, which increased 48.3 per cent, the company said in an earnings release issued Thursday after markets closed.
"The decrease in net earnings and reduction in adjusted EBITDA were primarily attributable to the significant decline in the Canadian dollar vis-a-vis the U.S. dollar, resulting in increased costs of goods sold and a significant loss on the remeasurement to fair value of option contracts," it added.
The company operates 845 stores consisting of 343 Reitmans, 143 Penningtons, 102 Addition Elle, 76 RW & CO., 68 Thyme Maternity and 113 Smart Set. It also operates 21 Thyme Maternity shop-in-shop boutiques in select Babies"R"Us locations in Canada.
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