Roots sees fourth-quarter sales jump, profits dip
today Apr 5, 2019
Premium outdoor lifestyle brand Roots ended fiscal 2018 with a net sales jump of 0.9 percent reaching $329 million. The company recorded a profit dip for both the final quarter and full-year, but managed to surpass analysts' expectations.
The Canadian company said full-year direct-to-consumer sales were down 0.1 percent at $283.9 million, compared to $284.1 million seen last year, but were up 1 percent when excluding the additional week in 2017.
Comparable sales also declined 1.3 percent, following a comparable sales growth of 12.2 percent in fiscal 2017.
For the fourth quarter ended February 2, the company's net sales were solid and totalled 130.8 million, up 0.6 percent as compared to $130 million in the fourth quarter of fiscal 2017. Direct-to-consumer sales were up 0.7 percent totaling $120.7 million, while Roots saw a comparable sales growth of 3.1 percent.
Fourth-quarter net income was $18.3 million, or $0.43 basic earnings per share, compared to $20.9 million, or $0.50 basic earnings per share. Analysts on average had expected a profit of 50 cents per share for the quarter on $129 million in revenue, according to Thomson Reuters Eikon.
Full-year net income was also down at $11.4 million, or $0.27 basic earnings per share, compared to $17.5 million, or $0.42 basic earnings per share.
"Roots resonates incredibly well with consumers during the holiday season, and that continued to be the case in Q4 2018," said Jim Gabel, President and Chief Executive Officer of Roots.
"In the quarter, we saw growth in key perennial product favourites and encouraging consumer response to new product introductions. In addition, we benefitted from store renovations, our ability to support higher levels of shopping activity during peak selling periods, and our success in overcoming challenges caused by the Canada Post strike.”
The Toronto-based company is continuing to grow in its main markets: Canada, the U.S and Asia, while it also focuses on product development in leather and footwear.
Most recently, it opened a new store and website dedicated to the Hong Kong market through its retail operating partner in Asia, Branded Lifestyle Group.
"Looking ahead, we remain confident that we are on track to achieve our fiscal 2019 targets," added Gabel.
"To build on our fiscal 2018 record revenue, we will execute our strategy with an amplified brand voice and the introduction of more seasonally transitional products, while also benefitting from the strategic investments we have made in the business.”
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