Roots Corp. reported a $4.08-million net loss for its second quarter. (Photo by THE CANADIAN PRESS)

Roots shares hit all-time low after earnings results come up short

TORONTO — Roots Corp. got a big sales boost from Canada’s 150th birthday, but now that the party’s over, the apparel brand is facing some troubles.

On Wednesday, the Toronto company known for its heritage-based products and leather goods reported a $4.08-million net loss for its second quarter, compared with a net loss of $3.2 million for the same period last year.

Roots’ adjusted net loss was $0.06 per share for the quarter that ended on Aug. 4, falling short of the $0.02 per share expectation from analysts surveyed by Thomson Reuters Eikon and double last year’s loss.

Chief executive officer Jim Gabel said the disparity followed a particularly strong second quarter in 2017 — when there was heightened interest in products emblazoned with Canadian flags, red and white designs and other nods to the country’s history.

During a Wednesday conference call with analysts, chief executive officer Jim Gabel said, “We benefited from one-time traffic and sales related to the celebration Canada’s 150th birthday throughout 2017, given our strong Canadian heritage and unmatched Canada collection.”

Now that the birthday year is over, Gabel said the company is seeing success in its women’s dresses, graphic T-shirt and fleece categories, which saw sales jump by 136, 25 and 33 per cent respectively.

But he admitted, there are areas where the company “can be better.” There is room for the expansion of seasonally relevant products in warmer months and more lighter weight sweats, dresses and graphic T-shirts, he said.

“We have made good progress on this front, but we haven’t transitioned far enough.”

The company’s stock plummeted on the news, closing down $1.46, or 15.65 per cent to a record low of $7.87, down more than one-third from its IPO price of $12 on Oct. 25.

On the bright side, total sales rose 3.6 per cent to $60.2 million in the second quarter compared to the same period last year, while its comparable sales growth increased 1.1 per cent.

The company faced some headwinds, when the summers brought “ebbs and flows” in store traffic, he said, but consumers are “increasingly embracing” the retailer’s e-commerce offerings.

Sales through Roots’ shop online and pick-up in-store offering have more than doubled and sales of items purchased online and delivered to consumers’ homes rose by 55 per cent year-over-year, he noted.

Just Posted

Red Deer students support cancer awareness campaign

West Park Elementary students wear blue

Man facing charges in home invasion going to trial next March

A man charged accused of shooting someone in a home invasion is… Continue reading

Red Deer intersection to temporarily close on Sept. 24, 25

Red Deer’s 40 Ave. and 47 St. intersection will be closed early… Continue reading

VIDEO: B.C. deer struggles with life-preserver caught in antlers

Campbell River resident captures entangled deer on camera

4 dead, including suspect, after Maryland warehouse shooting

ABDERDEEN, Md. — An employee at a Rite Aid warehouse opened fire… Continue reading

Trek to scale Alberta mountain ends in hospital for climbers caught in slide

JASPER, Alta. — Two people suffered serious but non-life-threatening injuries when they… Continue reading

Surrey man wins $500K, plans to build house, buy toys and ‘nice dinner’

Sukhwinder Sidhu bought winning ticket at store in Newton

Nominations open again for Toronto election after province’s legal victory

TORONTO — Nominations are once again open for candidates wishing to take… Continue reading

The Gap steps into the men’s athleisure game

NEW YORK — The Gap is stepping in to the men’s athleisure… Continue reading

Giant bong, huggable buds: Marijuana museum opens in Vegas

LAS VEGAS — A glass bong taller than a giraffe. Huggable faux… Continue reading

Buoyant stocks lift US household wealth, mainly for affluent

WASHINGTON — A rising stock market lifted U.S. household wealth to a… Continue reading

Polish police looking for man who threw stone into synagogue

WARSAW, Poland — Polish police are looking for a man who threw… Continue reading

Most Read