Roots tops expectations with double-digit growth in 2017

By

Jennifer Braun

Published
Apr 23, 2018

Canadian retailer Roots Corp. posted a sales increase of 15.7 percent last week, in its first full year results announced since completing an initial public offering in October. The 45-year-old apparel brand saw sales reach $326.1 million for the full year ended February 3, 2018.

 
DTC sales increased 16.3 percent to $284.1 million compared to Fiscal 2016, driven primarily by a comparable sales growth of 12.1 percent, and the opening of eight corporate retail stores during the year.
 
For fiscal 2017, sales in the 'partners and other' segment were $41.9 million, an 11.7 percent improvement over $37.5 million in 2016, driven by strength across all divisions, including the opening of 13 net new partner-operated stores in Asia (Taiwan and China) since the fourth quarter 2016. 

Total gross profit for the year increased 23.7 percent to $182.0 million.
 
Meanwhile, fourth quarter results were equally strong driven by outstanding holiday sales both in-store and online, and an impressive top and bottom-line growth. 
 
Total fourth-quarter 2017 sales increased 17 percent to $130 million from $111.2 million in 2016, with sales in the DTC segment increasing 17.6 percent to $119.8 million. Gross profit increased 18.9 percent to $75.8 million.
 
"In fiscal 2017, we generated exceptional growth across all channels and focus geographies." said Jim Gabel, President and Chief Executive Officer of Roots, in a news statement. "As a result, we delivered significant improvements in all of our key financial metrics. 
 
“Since starting the process of modernizing the Roots brand and transforming the business in Fiscal 2016, we have delivered eight consecutive quarters of positive Comparable Sales Growth, as well as notable improvements in gross margin and Adjusted EBITDA. While we are still in the early stages of executing our plan, we are even more confident in the significant long-term growth opportunities in front of us and our ability to achieve our Fiscal 2019 targets," he added.
 
The company’s shares were priced at $12 in its public offering, below its original set price range of $14 to $16 per share. It was seeking to raise about C$200 million.
 
By the end of fiscal 2019, the Canadian retailer expects sales of $410 million to $450 million, adjusted EBITDA of $61 million to $68 million and adjusted Net Income of $35 million to $40 million.