Le Chateau Reports Second Quarter Results
(firmenpresse) - MONTREAL, QUEBEC -- (Marketwired) -- 09/11/15 -- Le Chateau Inc. (TSX: CTU.A), a leading Canadian brand in specialty retailing, offering a broad array of contemporary fashion apparel, accessories and footwear for style-conscious women and men, today reported its results for the second quarter ended August 1, 2015. The 2015 year refers to the 26-week period ended August 1, 2015 while the 2014 year refers to the 26-week period ended July 26, 2014.
Sales for the second quarter ended August 1, 2015 decreased 7.3% to $63.3 million from $68.3 million for the second quarter ended July 26, 2014. Sales were negatively impacted for the second quarter of 2015 by reduced mall and store traffic. The retail environment remains competitive but some signs of improvements are appearing in the aftermath of significant industry consolidation. Comparable store sales decreased 3.9% for the second quarter as compared to last year. Included in comparable store sales are online sales which increased 34.5% for the second quarter.
Earnings (loss) before interest, income taxes, depreciation, amortization, write-off and/or impairment of property and equipment ("Adjusted EBITDA") (see non-GAAP measures below) for the second quarter amounted to $2.2 million, compared to $2.9 million for the same period last year. The decrease of $647,000 in adjusted EBITDA for the second quarter was primarily attributable to the decrease of $1.7 million in gross margin dollars, offset by a decrease in selling, general and administrative expenses of $1.1 million. The decrease of $1.7 million in gross margin dollars was the result of the 7.3% decline in sales for the second quarter of 2015, offset by the increase in gross margin percentage to 66.6% from 64.2% in 2014. The gross margin improvement in the second quarter of 2015 resulted from reduced promotional activity.
Net loss for the second quarter ended August 1, 2015 amounted to $4.0 million or $(0.13) per share compared to a net loss of $3.0 million or $(0.10) per share for the same period last year.
Six-month Results
Sales for the six months ended August 1, 2015 decreased 6.2% to $114.0 million from $121.6 million last year. Comparable store sales decreased 5.0% versus the same period a year ago. Included in comparable store sales are online sales which increased 29.3% for the six months ended August 1, 2015.
Adjusted EBITDA for the six months ended August 1, 2015 amounted to $(4.9) million, compared to $(6.4) million last year. The improvement of $1.5 million in adjusted EBITDA for the first six months was primarily attributable to a decline in selling, general and administrative expenses of $3.0 million, offset by a decrease of $1.5 million in gross margin dollars. The decrease of $1.5 million in gross margin dollars was the result of the 6.2% decline in sales for the first half of 2015, offset by the increase in gross margin percentage to 65.6% from 62.7% in 2014. The gross margin improvement in the first half of 2015 resulted from reduced promotional activity.
Net loss for the six-month period ended August 1, 2015 amounted to $16.4 million or $(0.55) per share compared to a net loss of $16.0 million or $(0.57) per share the previous year.
During the first six months of 2015, the Company closed two stores and renovated five existing locations. Total square footage for the Le Chateau network as at August 1, 2015 amounted to 1,203,000 square feet, compared to 1,237,000 square feet as at July 26, 2014.
Third Quarter of 2015
During the preceding three years, in response to significant competition entering the Company''s markets, the Company embarked on a major product repositioning and rebranding project. In conjunction with the project, the Company initiated a store renovation program and in mid-August, launched a marketing campaign across Canada in collaboration with Sid Lee. The campaign combines TV, billboards and social media, and aims to raise brand awareness. Consumers are rediscovering our brand and products, and we believe this will have a sustainable impact. We remain optimistic about the opportunity to grow our business and improve our margins.
For the first five weeks ended September 5, 2015, total retail sales decreased 1.6% and comparable store sales increased 3.2% compared to the same period last year. Included in comparable store sales are online sales which increased 16.1%.
For the year-to-date, the Company renovated four stores: Scarborough Town Centre in Ontario on April 1, 2015, Fairview Pointe Claire in Quebec on May 21, 2015, Mayfair Shopping Centre in British Columbia on September 3, 2015 and Yorkdale Shopping Centre in Ontario on September 10, 2015. The Company plans to launch an additional renovated store in September 2015 at the St. Laurent Shopping Centre in Ottawa, Ontario.
Profile
Le Chateau is a leading Canadian brand in specialty retailing, offering a broad array of contemporary fashion apparel, accessories and footwear for style-conscious women and men. The Le Chateau brand is sold exclusively through the Company''s 220 retail locations, of which 219 are located in Canada. The Company''s retail locations are primarily found in major urban shopping malls, as well as street-front locations with high pedestrian traffic. In addition, the Company has 4 stores under license in the Middle East. Le Chateau''s web-based marketing is further broadening the Company''s customer base among internet shoppers in both Canada and the United States. With its 56-year tradition of vertical integration, emphasizing a design and manufacturing approach to retailing, Le Chateau is unique among Canadian fashion merchants.
Non-GAAP Measures
In addition to discussing earnings measures in accordance with IFRS, this press release provides adjusted EBITDA as a supplementary earnings measure, which is defined as earnings (loss) before interest, income taxes, depreciation, amortization, write-off and/or impairment of property and equipment. Adjusted EBITDA is provided to assist readers in determining the ability of the Company to generate cash from operations and to cover financial charges. It is also widely used for valuation purposes for public companies in our industry.
The following table reconciles adjusted EBITDA to loss before income tax recovery for the three and six-month periods ended August 1, 2015 and July 26, 2014:
The Company also discloses comparable store sales which are defined as sales generated by stores that have been open for at least one year. Comparable store sales exclude sales from stores converted to outlet or clearance stores during the year of conversion.
The above measures do not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.
Forward-Looking Statements
This news release may contain forward-looking statements relating to the Company and/or the environment in which it operates that are based on the Company''s expectations, estimates and forecasts. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond the Company''s control. A number of factors may cause actual outcomes and results to differ materially from those expressed. These factors also include those set forth in other public filings of the Company. Therefore, readers should not place undue reliance on these forward-looking statements. In addition, these forward-looking statements speak only as of the date made and the Company disavows any intention or obligation to update or revise any such statements as a result of any event, circumstance or otherwise except to the extent required under applicable securities law.
Factors which could cause actual results or events to differ materially from current expectations include, among other things: the ability of the Company to successfully implement its business initiatives and whether such business initiatives will yield the expected benefits; competitive conditions in the businesses in which the Company participates; changes in consumer spending; general economic conditions and normal business uncertainty; seasonality and weather patterns; changes in the Company''s relationship with its suppliers; lease renewals; information technology security and loss of customer data; fluctuations in foreign currency exchange rates; interest rate fluctuations; liquidity risk and changes in laws, rules and regulations applicable to the Company. The foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results.
The Company''s unaudited interim condensed consolidated financial statements and Management''s Discussion and Analysis for the second quarter ended August 1, 2015 are available online at .
Contacts:
Emilia Di Raddo, CPA, CA
President
(514) 738-7000
Johnny Del Ciancio, CPA, CA
Vice-President, Finance
(514) 738-7000
MaisonBrison:
Pierre Boucher
(514) 731-0000
Source:
Le Chateau Inc.
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Datum: 11.09.2015 - 15:51 Uhr
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News-ID 1384925
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