The earnings call reflects a mixed performance with positive trends in full price sales, activewear, and successful collaborations, but challenges remain with overall sales declines and economic uncertainties affecting consumer behavior.

Company Guidance

During the Roots Third Quarter Earnings Conference Call for Fiscal 2023, executives provided guidance highlighting several key metrics and strategic initiatives. The company reported a total sales decline of 9% year-over-year to $63.5 million, notably driven by an 8.2% decrease in direct-to-consumer (DTC) sales. However, full-price DTC sales grew by 3%, reflecting a strategic focus on strengthening the product portfolio and reducing reliance on promotional sales. Gross profit margin improved by 190 basis points to 58.4%, aided by a higher mix of full-price sales and lower freight costs. Inventory levels were reduced by 16% year-over-year to $61.4 million, the healthiest third-quarter position in the past five years. The company maintained a cautious outlook for Q4, balancing macroeconomic headwinds with strategic initiatives like early Black Friday promotions and continued investment in product and marketing innovations. Adjusted EBITDA was reported at $5.5 million, and net income totaled $519,000 or $0.01 per share. Roots also noted a reduction in net debt by 10% to $32.9 million, highlighting strong liquidity with $58.1 million available at quarter-end.

Growth in Full Price Direct-to-Consumer Sales

Full price DTC sales grew 3% year-over-year, reflecting strengthened product portfolio and positive brand engagement.

Activewear Success

Activewear category continues to grow, achieving over 50% year-over-year growth in the quarter.

Successful Collaborations

The Barbie and CLOT collaborations introduced new customers, generated media attention, and had high sell-through rates.

Improved Gross Profit Margin

Total gross profit margin increased by 190 basis points to 58.4%, driven by higher-margin DTC sales and lower freight costs.

Inventory Management

Inventory decreased by 16% year-over-year, representing the healthiest third quarter level in the last 5 years.

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Roots Corporation (TSE:ROOT) Earnings, Revenues Date & History

The upcoming earnings date is based on a company’s previous reporting, and may be updated when the actual date is announced

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TSE:ROOT Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Sep 12, 2018	2018 (Q2)	- / -0.06	-0.03	-100.00% (-0.03)	―	―
Dec 05, 2018	2018 (Q3)	- / 0.11	0.23	-52.17% (-0.12)	―	―
Apr 03, 2019	2018 (Q4)	- / 0.53	0.59	-10.17% (-0.06)	―	―
Jun 12, 2019	2019 (Q1)	- / -0.17	-0.11	-54.55% (-0.06)	―	―
Sep 11, 2019	2019 (Q2)	- / -0.15	-0.06	-150.00% (-0.09)	―	―
Dec 06, 2019	2019 (Q3)	- / 0.10	0.11	-9.09% (>-0.01)	―	―
Apr 29, 2020	2019 (Q4)	- / 0.31	0.53	-41.51% (-0.22)	―	―
Jun 12, 2020	2020 (Q1)	- / -0.22	-0.17	-29.41% (-0.05)	―	―
Sep 10, 2020	2020 (Q2)	- / -0.04	-0.15	73.33% (+0.11)	―	―
Dec 09, 2020	2020 (Q3)	- / 0.27	0.1	170.00% (+0.17)	―	―

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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TSE:ROOT Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Dec 11, 2024	C$2.04	C$2.26	+10.78%
Sep 13, 2024	C$2.18	C$2.15	-1.38%
Jun 10, 2024	C$2.20	C$2.13	-3.18%
Apr 10, 2024	C$2.45	C$2.56	+4.49%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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