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Le Château Reports Fourth Quarter and Year-End Results

Written by Customer Service on . Posted in Public Companies.

MONTRÉAL, July 06, 2020 (GLOBE NEWSWIRE) — Le Château Inc. (TSX VENTURE: CTU), today reported financial results for the fourth quarter and year ended January 25, 2020 which reflect the impact of the implementation of IFRS 16, as described below under “Adoption of IFRS 16 – Leases”.
Sales for the fourth quarter ended January 25, 2020 amounted to $48.0 million as compared with $51.4 million for the fourth quarter ended January 26, 2019, a decrease of 6.5%, with 10 fewer stores in operation. Comparable store sales, which include online sales, decreased 3.3% versus the same period a year ago, with comparable regular store sales decreasing 4.4% and comparable outlet store sales increasing 6.1% (see non-GAAP measures below). Sales continued to be negatively impacted by reduced mall and store traffic. The Company continues to experience strong growth through its online channel with online sales increasing 28.9% for the fourth quarter.Net loss for the fourth quarter ended January 25, 2020 amounted to $51.2 million or $(1.71) per share compared to a net loss of $6.1 million or $(0.20) per share for the same period last year. The net loss for the fourth quarter of 2019 included a $42.0 million write-off and impairment of long-term assets, compared with $25,000 for the same period last year.Adjusted EBITDA (see non-GAAP measures below) for the fourth quarter of 2019 amounted to $1.9 million, compared to $(1.7) million for the same period last year, an improvement of $3.6 million. The improvement in adjusted EBITDA includes a favorable impact of IFRS 16 of $7.3 million. Excluding the $7.3 million impact of IFRS 16, the adjusted EBITDA for the fourth quarter was $(5.4) million compared with $(1.7) million for same period last year. The decrease of $3.7 million in adjusted EBITDA for the fourth quarter of 2019 was primarily attributable to the reduction of $5.8 million in gross margin dollars, partially offset by the decrease in selling, distribution and administrative expenses of $2.1 million. The decrease in selling, distribution and administrative expenses resulted primarily from the reduction in store operating expenses, due mainly to store closures, and a reduction in head office infrastructure costs. The decrease of $5.8 million in gross margin dollars was the result of the 6.5% overall sales decline for the fourth quarter, combined with the decrease in gross margin percentage to 52.0% from 59.9% in 2018. The decline in the gross margin percentage for the fourth quarter was the result of inventory write-downs totaling $4.0 million compared with $1.3 million for the same period last year, combined with increased promotional activity.Year-end Results
Sales for the year ended January 25, 2020 amounted to $175.9 million as compared with $190.9 million last year, a decrease of 7.8%, with 10 fewer stores in operation. Comparable store sales, which include online sales, decreased 3.8% versus the same period a year ago, with comparable regular store sales decreasing 4.8% and comparable outlet store sales increasing 3.8%. The Company continues to experience strong growth through its online channel with online sales increasing 20.8% for the year.

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