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Reitmans (Canada) Limited Class A (TSE:RET.A)
:RET.A
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Reitmans (Canada)
(OTC:RET.A)
66Neutral
Reitmans (Canada) (RET.A) vs. S&P 500 (SPY)
Market Cap
$109.99M
Dividend YieldN/A
Average Volume (3M)18.25K
Price to Earnings (P/E)6.7
Beta (1Y)0.62
Revenue Growth0.81%
EPS Growth-61.74%
CountryCA
Employees2,621
SectorConsumer Cyclical
Sector Strength52
IndustryApparel - Retail
Share Statistics
EPS (TTM)0.33
Shares Outstanding35,946,090
10 Day Avg. Volume19,922
30 Day Avg. Volume18,255
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.15
Price to Cash Flow (P/CF)1.80
P/FCF Ratio2.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Reitmans (Canada) Business Overview & Revenue Model
Company DescriptionReitmans (Canada) Limited (RET.A) is a prominent Canadian retailer specializing in women's apparel and accessories. Founded in 1926, the company operates a diverse portfolio of retail brands, including Reitmans, Penningtons, and RW&CO., catering to a wide range of fashion preferences and sizes. With a strong presence across Canada, Reitmans offers stylish, quality clothing at affordable prices, aiming to enhance the shopping experience for its customers through both physical stores and online platforms.
How the Company Makes MoneyReitmans (Canada) Limited generates revenue primarily through the sale of women's clothing and accessories. The company operates multiple retail brands, each targeting a specific market segment, thereby diversifying its income streams. Reitmans earns money by selling products directly to consumers via its extensive network of physical retail stores and through its e-commerce platforms. The company also benefits from strategic marketing initiatives and customer loyalty programs that encourage repeat purchases. Additionally, Reitmans enhances its earnings by optimizing its supply chain operations and managing inventory effectively to meet customer demand while maximizing profit margins.
Reitmans (Canada) Financial Statement Overview
Summary
Reitmans (Canada) demonstrates solid profitability and cash flow generation, with strong gross margins and cash flow ratios. The balance sheet is stable, supported by a healthy equity ratio and moderate leverage. However, challenges in revenue growth and relatively low ROE highlight areas for improvement.Income Statement
The company shows a strong gross profit margin of 54.5% for TTM, indicating efficient cost management. Net profit margin improved to 2.1% TTM from 1.9% annually, reflecting better bottom-line performance. However, revenue growth is negative at -0.6% TTM, suggesting a slight decline in sales. EBIT and EBITDA margins are moderate at 3.2% and 10.6% TTM, respectively, indicating stable operating profitability.75
Positive
Balance Sheet
The balance sheet indicates a healthy equity position with an equity ratio of 55.5% TTM, signifying financial stability. The debt-to-equity ratio is manageable at 0.50 TTM, reflecting moderate leverage. However, ROE is relatively low at 5.5% TTM, suggesting limited returns on equity investments.70
Positive
Cash Flow
The company reports robust free cash flow growth of 24.9% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is high at 5.75 TTM, demonstrating efficient cash earnings. Free cash flow to net income ratio stands at 3.97 TTM, showcasing strong cash conversion efficiency.80
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 789.94M | 794.69M | 661.95M | 533.36M | 869.50M | 923.02M | Gross Profit |
| 430.27M | 431.00M | 353.17M | 246.25M | 444.39M | 509.51M | EBIT |
| 25.42M | 22.93M | 143.15M | -108.00M | -51.44M | 18.24M | EBITDA |
| 83.75M | 76.22M | 94.70M | 194.46M | -41.58M | 42.14M | Net Income Common Stockholders |
| 16.30M | 14.81M | 158.26M | -172.22M | -87.43M | 6.76M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 276.60M | 116.65M | 25.50M | 77.92M | 89.41M | 162.21M | Total Assets |
| 631.39M | 490.75M | 314.27M | 397.23M | 560.17M | 492.82M | Total Debt |
| 12.73M | 137.59M | 81.94M | 123.22M | 213.87M | 213.87M | Net Debt |
| -215.85M | 20.94M | 56.44M | 45.30M | 124.46M | 101.35M | Total Liabilities |
| 121.23M | 211.73M | 130.45M | 375.55M | 366.35M | 153.22M | Stockholders Equity |
| 510.17M | 279.02M | 183.83M | 21.68M | 193.82M | 339.60M |
| Cash Flow | Free Cash Flow | ||||
| 64.75M | 51.83M | -35.38M | 34.03M | 53.70M | 15.88M | Operating Cash Flow |
| 93.65M | 69.53M | -24.73M | 40.20M | 77.18M | 42.01M | Investing Cash Flow |
| -28.90M | -17.70M | -15.22M | -6.16M | 17.95M | -26.01M | Financing Cash Flow |
| -47.58M | -39.90M | -9.19M | -46.82M | -121.78M | -12.67M |
Reitmans (Canada) Technical Analysis
Negative
2.20
Price Trends
2.30
Negative
2.42
Negative
2.43
Negative
Market Momentum
-0.03
Positive
39.02
Neutral
34.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RET.A, the sentiment is Negative. The current price of 2.2 is below the 20-day moving average (MA) of 2.26, below the 50-day MA of 2.30, and below the 200-day MA of 2.43, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 39.02 is Neutral, neither overbought nor oversold. The STOCH value of 34.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:RET.A.
Reitmans (Canada) Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $5.82B | 42.60 | 15.44% | ― | 10.36% | 41.78% | |
68 Neutral | $9.66B | 18.87 | 23.48% | 1.85% | 4.03% | -16.63% | |
66 Neutral | $109.99M | 6.66 | 5.73% | ― | 0.81% | -61.74% | |
66 Neutral | $8.54B | 9.36 | 15.17% | 4.93% | -1.79% | 318.70% | |
64 Neutral | C$97.07M | 34.50 | 1.62% | ― | -2.09% | 2551.85% | |
59 Neutral | $12.17B | 11.04 | -1.10% | 3.77% | 1.26% | -19.70% | |
45 Neutral | C$20.00M | ― | -119.27% | ― | 1.15% | 25.39% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:RET.A
Reitmans (Canada)
2.20
-0.33
-13.04%
TSE:GIL
Gildan Activewear
65.24
16.42
33.63%
TSE:ATZ
Aritzia
50.22
14.16
39.27%
TSE:CTC.A
Canadian Tire
150.35
22.63
17.72%
TSE:TGO
TeraGo Inc.
1.05
-0.59
-35.98%
TSE:ROOT
Roots Corporation
2.36
0.06
2.61%
Reitmans (Canada) Earnings Call Summary
Earnings Call Date: Dec 19, 2024 | % Change Since: -12.35% | Next Earnings Date: Apr 10, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative aspects. While the company showed improvements in gross margin, financial stability, and store expansion, it faced challenges with declining net revenue, comparable sales, EBITDA, and net earnings. The strategic focus on long-term growth and operational improvements indicates potential for future recovery.Highlights
Improved Gross Margin
The company achieved a 166 basis point improvement in gross margin, increasing from 55.6% to 57.3% year-over-year, due to strong inventory management and reduced promotional activities.
Strong Financial Position
Reitmans ended the quarter with $123.1 million in cash, $141.3 million in inventory, and zero debt, maintaining a completely undrawn $150 million revolving credit facility.
Successful Store Openings
New RW&Co. store opened in Mirabel Premium Outlet, Quebec, and two new PENN stores opened in Avalon Mall, St. John's, and Durham Center, Ajax.
Growth in Menswear and Loyalty Programs
Continued strong growth in menswear for RW&Co. and positive customer and loyalty performance indicators for the company.
Lowlights
Decline in Net Revenue
Net revenues decreased by 2.9% from $193.4 million to $187.7 million, attributed to lower store count and delayed seasonal purchases due to warmer weather.
Reduced Comparable Sales
Comparable sales fell by 1.9%, primarily due to lower e-commerce traffic, though this was partially offset by increased sales per transaction.
Decrease in Adjusted EBITDA
Adjusted EBITDA dropped from $9.5 million to $3.8 million, largely due to a $3.2 million increase in SG&A expenses and higher foreign exchange losses.
Decrease in Net Earnings
Net earnings decreased from $5.3 million ($0.11 per share) to $2.1 million ($0.04 per share) year-over-year.
Company Guidance
During Reitmans Canada Limited's fiscal 2025 third-quarter earnings call, management provided detailed guidance on several metrics. Net revenues were reported at $187.7 million, a decrease of 2.9% from the previous year due to a lower store count and delayed customer purchases caused by warmer-than-normal weather. Comparable sales dipped by 1.9%, largely impacted by reduced e-commerce traffic. Despite this, gross profit remained stable at $107.6 million, with a notable improvement in gross margin by 166 basis points to 57.3%. Adjusted EBITDA for the quarter was $3.8 million, down from $9.5 million the previous year, primarily due to increased selling, general and administrative expenses and a rise in foreign exchange loss. The company ended the quarter with a strong cash position of $123.1 million and zero debt, while capital expenditures for the fiscal year are projected at $31 million, with $20.1 million spent in the first nine months.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.