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Le Château Reports Third Quarter Results

Written by Customer Service on . Posted in Public Companies.

MONTRÉAL, Dec. 20, 2019 (GLOBE NEWSWIRE) — Le Château Inc. (TSX VENTURE: CTU), today reported financial results for the third ended October 26, 2019. Unless otherwise indicated, the Company’s results for the third quarter reflect the impact of the implementation of IFRS 16, as described below under “Adoption of IFRS 16 – Leases”.Sales for the third quarter ended October 26, 2019 amounted to $42.1 million as compared with $45.1 million for the third quarter ended October 27, 2018, a decrease of 6.5%, with 12 fewer stores in operation. Comparable store sales, which include online sales, decreased 4.0% versus the same period a year ago, with comparable regular store sales decreasing 4.0% and comparable outlet store sales decreasing 3.9% (see non-GAAP measures below). Sales continue to be negatively impacted by reduced mall and store traffic.Net loss for the third quarter ended October 26, 2019 amounted to $6.9 million or $(0.23) per share compared to a net loss of $6.7 million or $(0.22) per share for the same period last year. The net loss for the third quarter of 2019 included a favorable impact of IFRS 16 of $62,000.Adjusted EBITDA (see non-GAAP measures below) for the third quarter of 2019 amounted to $4.1 million, compared to $(2.1) million for the same period last year, an improvement of $6.2 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 third quarter was $(3.2) million compared with $(2.1) million for same period last year. The decrease of $1.1 million in adjusted EBITDA for the third quarter of 2019 was primarily attributable to the reduction of $4.0 million in gross margin dollars, partially offset by the decrease in selling, distribution and administrative expenses of $2.9 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 $4.0 million in gross margin dollars was the result of the 6.5% overall sales decline for the third quarter, combined with the decrease in gross margin percentage to 61.6% from 66.3% in 2018. The decline in the gross margin percentage for the third quarter was the result of increased promotional activity, combined with the short-term liquidation process of store merchandise during the closing period for certain stores.Nine-month Results

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