Le Chateau Reports Fourth Quarter and Year-End Results
(firmenpresse) - MONTREAL, QUEBEC -- (Marketwired) -- 04/15/16 -- 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 fourth quarter ended January 30, 2016. The 2015 year refers to the 52-week period ended January 30, 2016 while the 2014 year refers to the 53-week period ended January 31, 2015.
Sales for the 13-week period ended January 30, 2016 amounted to $65.2 million, a decrease of 7.5% from $70.5 million for the 14-week period ended January 31, 2015. On a comparable week basis, the total sales for the 13-week period ended January 30, 2016 decreased 2.1%, with 11 fewer stores in operations, compared to the 13-week period ended January 31, 2015. Comparable store sales increased 0.1% for the fourth quarter as compared to last year (see non-GAAP measures below). As expected, the benefits of the Canada-wide media campaign starting in August 2015 were well reflected in regular stores, online sales and also in the Ladies and Footwear divisions. Comparable store sales for the Company''s 146 regular stores (excluding fashion outlets) increased 0.7% for the fourth quarter as compared to last year. Included in comparable store sales are online sales which increased 41.3% for the fourth quarter.
Earnings (loss) before interest, income taxes, depreciation, amortization, write-off and/or impairment of property and equipment, and gain on disposal of property and equipment ("Adjusted EBITDA") (see non-GAAP measures below) for the fourth quarter of 2015 amounted to $(675,000), compared to $(5.8) million for the same period last year. The improvement of $5.2 million in adjusted EBITDA for the fourth quarter was primarily attributable to the decrease of $4.4 million in selling, general and administrative ("SG&A") expenses, as well as an increase in gross margin dollars of $821,000. The increase of $821,000 in gross margin dollars was the result of an increase in gross margin percentage to 61.9% from 56.1% in 2014. The gross margin improvement in the fourth quarter of 2015 resulted from reduced promotional activity and fewer write-downs of finished goods inventory, partially offset by the pressure of the weaker Canadian dollar on merchandise purchased. For the fourth quarter ended January 30, 2016, the Company recorded net write-downs of inventory totaling $300,000, compared to $3.9 million the previous year. The reduced amount reflects our on-going efforts over the past few years to reduce and improve the mix of inventory.
Net loss for the fourth quarter ended January 30, 2016 amounted to $6.9 million or $(0.23) per share compared to a net loss of $11.6 million or $(0.39) per share for the same period last year.
Year-end Results
Sales for the 52-week period ended January 30, 2016 decreased 5.3% to $236.9 million from $250.2 million for the 53-week period ended January 31, 2015. On a comparable week basis, the total sales for the 52-week period ended January 30, 2016 decreased 4.0%, with 11 fewer stores in operations, compared to the 52-week period ended January 31, 2015. Comparable store sales decreased 1.9% versus the same period a year ago. Included in comparable store sales are online sales which increased 34.8% for the year ended January 30, 2016.
Adjusted EBITDA for the year ended January 30, 2016 amounted to $(12.8) million, compared to $(17.1) million last year. The improvement of $4.3 million in adjusted EBITDA for 2015 was primarily attributable to a decrease of $3.9 million in SG&A expenses, as well as an increase of $428,000 in gross margin dollars. SG&A expenses decreased due to reductions in store operating costs and head office expenses, offset by the launch of our Canada-wide media campaign that started in August 2015. The increase of $428,000 in gross margin dollars was the result of an increase in gross margin percentage to 64.2% from 60.6% in 2014, offset by the 5.3% decline in sales for 2015. The gross margin improvement for 2015 resulted from reduced promotional activity and fewer write-downs of finished goods inventory, partially offset by the pressure of the weaker Canadian dollar on merchandise purchased. For the year ended January 30, 2016, the Company recorded net write-downs of inventory totaling $300,000, compared to $5.3 million the previous year. The reduced amount reflects our on-going efforts over the past few years to reduce and improve the mix of inventory.
Net loss for the year ended January 30, 2016 amounted to $35.7 million or $(1.19) per share compared to a net loss of $38.7 million or $(1.34) per share the previous year.
During the year, the Company closed 11 stores considering our strategy to continue to recalibrate our retail network and close underperforming stores. As at January 30, 2016, the Company operated 211 stores (including 65 fashion outlet stores) compared to 222 stores (including 42 fashion outlet stores) as at January 31, 2015. Total square footage for the Le Chateau network as at January 30, 2016 amounted to 1,162,000 square feet (including 460,000 square feet for fashion outlet stores), compared to 1,219,000 square feet (including 388,000 square feet for fashion outlet stores) as at January 31, 2015. In 2016, the Company is planning to close approximately 14 stores and expects its total square footage to decline from 1,162,000 to 1,100,000 square feet. Over the next three years, the Company plans on reducing its retail floor space by over 200,000 square feet representing approximately 40 stores, predominantly coming from the fashion outlet stores.
During the year ended January 30, 2016, the Company renovated five 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, Yorkdale Shopping Centre in Ontario on September 10, 2015 and St. Laurent Shopping Centre in Ottawa, Ontario on September 18, 2015.
Strategy
Over the past few years, the retail landscape has evolved and consumer shopping habits have changed significantly with e-commerce. In light of this evolution, the high concentration of stores in large urban markets - a successful model in the pre-digital world - is no longer required. Consequently, in light of these changes and situation, our strategy is to continue to recalibrate our retail network and close underperforming stores. Since 2012, in response to significant new competition, 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 August 2015, launched a marketing campaign across Canada in collaboration with Sid Lee, which led to the "Le Chateau of Montreal" brand refreshing. The campaign combined TV, billboards and social media, and raised brand awareness. Consumers rediscovered our brand and products, and we believe this will have a sustainable impact. Direct benefits of the media campaign were reflected in the sales of the Ladies and Footwear divisions with year-over-year increases of 3.9% and 11.1% in comparable store sales for the second half of 2015, respectively. Overall, we remain optimistic about the opportunity to grow our business and improve our margins.
First Quarter of 2016
For the first ten weeks ended April 9, 2016, total retail sales decreased 3.7%, with 12 fewer stores in operation, and comparable store sales decreased 1.5% compared to the same period last year. Included in comparable store sales are online sales which increased 50.4%.
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 209 retail stores 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 57-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, and gain on disposal 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 fourth quarters and years ended January 30, 2016 and January 31, 2015:
The Company also discloses comparable store sales which are defined as sales generated by stores that have been open for at least one year on a comparable week basis. Comparable store sales exclude sales from stores converted to outlet or clearance stores during the year of conversion.
The following table reconciles comparable store sales to total sales disclosed in the consolidated statements of loss for the fourth quarters and years ended January 30, 2016 and January 31, 2015:
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 consolidated financial statements and Management''s Discussion and Analysis for the year ended January 30, 2016 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: 15.04.2016 - 15:07 Uhr
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