Roots starts the year with 3.7% sales decrease
Canadian outdoor lifestyle brand Roots
The Toronto-based company said sales decreased to $41.5 million for its first quarter ended April 29, 2023, down from $43.1 million in the first quarter of fiscal 2022.
In particular, direct-to-consumer sales including corporate retail store and e-commerce sales reached $35.4 million, down 5.3% year-over-year. The decrease was attributed to continued economic environment headwinds and a heightened promotional environment.
On a positive note, P&O sales, which includes wholesale branded products, and licensing agreements, amounted to $6.1 million, up 6.9% from $5.7 million in Q1 2022. The increase was in part due to higher sales from the company’s international operating partner in Taiwan.
It also benefited from increased royalties for licensing agreements to select manufacturing partners, and a favourable foreign exchange rate.
Net loss totalled $8 million, or $0.19 per share, in Q1 2023, as compared to $5.3 million, or ($0.13) per share, in Q1 2022.
Meghan Roach, president and chief executive officer of Roots remained optimistic: “Our Q1 2023 results aligned with our internal projections and reflect a challenging economic environment,” said said.
“Considering our historical patterns, it is worth noting that the first quarter traditionally represents less than 15% of our annual sales. Consequently, our results also include several of the strategic investments made in our business during the first half of the year that support our revenue-intensive second half.”
Earlier this year, Roots appointed Joey Gollish as a creative director in residence, marking the first time in Roots history that it has welcomed an outside creative to the brand.
Gollish founded the acclaimed fashion label Mr. Saturday in 2019. He was also recently named Canada’s 2022 Menswear Designer of The Year by Canadian Arts & Fashion Awards.
