Fourth Quarter of 2024 Net revenues were $221.0 million Results from operating activities were $0.5 million  Net earnings were $0.0 million Fiscal 2024 Net revenues were $794.7 million Results from operating activities were $22.9 million   Net earnings were $14.8 million MONTREAL, April 18, 2024 /CNW/ - Reitmans (Canada) Limited ("RCL" or the "Company") (TSXV:RET) (TSXV:RET), Canada's leading specialty apparel retailer, announces its results for the fourth quarter of fiscal 2024. Unless otherwise indicated, all comparisons of results for the 14 weeks ended February 3, 2024 ("fourth quarter of 2024") are against results for the 13 weeks ended January 28, 2023 ("fourth quarter of 2023") and all comparisons of results for the 53 weeks ended February 3, 2024 ("fiscal 2024") are against the results for the 52 weeks ended January 28, 2023 ("fiscal 2023"). The inclusion of an extra week occurs every fifth or sixth fiscal year due to the Company's floating year-end date. All amounts are in Canadian dollars.  "We are pleased with the results for the fourth quarter of 2024 which capped off a year that saw significant headwinds for the retail industry with high inflation and high interest rates negatively impacting consumer shopping behaviour", said Andrea Limbardi, President and Chief Executive Officer of RCL. "Results from operating activities for the fourth quarter of fiscal 2024 and the full fiscal 2024 year were amongst the best for RCL in a decade, even after excluding the extra week of fiscal 2024 and an unfavourable foreign exchange impact. Having come off an exceptional year in fiscal 2023, driven by post COVID demand, fiscal 2024 was a year adjusting to a new reality in consumer shopping behaviour. RCL is positioning itself to accelerate growth through initiatives aimed at delivering exceptional product at competitive prices across all channels. To facilitate this growth, modernization in digital technology including 3D design capabilities, improved handling systems in our distribution facility and a new point of sale system are but a few of the improvements being delivered over the next 12 months.  We are confident of the future and remain focused on delivering long-term value to our shareholders". Select Financial Information (in millions of dollars, except for gross profit %)     For the fourth quarter of For fiscal 2024 2023 Change 2024 2023 Change Net revenues2 221.0 212.9 3.8 % 794.7 803.3 (1.1) % Gross profit 114.9 109.5 4.9 % 431.0 451.4 (4.5) % Gross profit % 52.0 % 51.4 % 60 bps 54.2 % 56.2 % (200) bps Selling, distribution and administrative expenses2 114.4 113.9 0.4 % 408.1 403.1 1.2 % Net earnings 0.0 27.5 (100.0) % 14.8 77.7 (81.0) % Adjusted EBITDA1 1.7 (3.7) n/a 29.2 57.0 (48.8) % Adjusted ROA1 0.5 (6.3) n/a 22.0 45.7 (51.9) % 1 This is a Non-GAAP Financial Measure. See "Non-GAAP Financial Measures & Supplementary Financial Measures" for reconciliations of these measures. 2 For the fourth quarter of 2023 and fiscal 2023, shipping revenues of $1.0 and $2.6 million, respectively, were reclassified from selling, distribution and administrative expenses to net revenues.  See Notes 3 and 23 of the audited consolidated financial statements for the fiscal 2024. In addition, selling, distribution and administrative expenses includes $0.9 million of pension curtailment gain for fiscal 2024, $1.9 million of restructuring costs recovery for the fourth quarter of 2023 and $1.4 million of restructuring costs recovery for fiscal 2023. 14 weeks ended February 3, 2024 Net revenues for the fourth quarter of 2024, which includes an additional week of net revenue of $10.0 million, increased by $8.1 million, or 3.8%, to $221.0 million compared to the fourth quarter of fiscal 2023. Comparable sales1, which include e-commerce net sales, decreased 1.6% during the fourth quarter of 2024. The decrease in comparable sales was primarily due to lower average transaction values and higher promotional activity. We believe that comparatively higher interest rates and inflation overall compared to the corresponding period last year negatively impacted consumer spending during the fourth quarter of 2024. Gross profit for the fourth quarter of 2024 increased $5.4 million to $114.9 million as compared with $109.5 million for the fourth quarter of 2023. Gross profit as a percentage of net revenues for the fourth quarter of 2024 increased to 52.0% from 51.4% for the fourth quarter of 2023. The improvement in gross profit and the increase in gross profit as a percentage of net revenues was primarily a result of the impact of inclusion of a 14th week (instead of the normal 13 weeks) of $5.5 million, lower supply chain costs in the fourth quarter of 2024 as global shipping industry disruptions were prevalent in the fourth quarter of 2023, partially offset by an unfavorable foreign exchange impact of approximately $2.6 million on U.S. dollar denominated purchases in the fourth quarter of 2024. Adjusted results from operating activities ("Adjusted ROA") for the fourth quarter of 2024 was $0.5 million as compared with $(6.3) million for the fourth quarter of 2023. The increase of $6.8 million is primarily attributable to the increase in gross profit. The Company had net earnings of nil for the fourth quarter of 2024 ($0.00 basic and diluted earnings per share) as compared with net earnings of $27.5 million ($0.56 basic and diluted earnings per share) for the fourth quarter of 2023. The decrease in net earnings of $27.5 million is primarily attributable to the recognition of previously unrecognized tax assets in fiscal 2023, as well as to the increase in operating costs in fiscal 2024, partially offset by the increase in gross profit in fiscal 2024. Adjusted EBITDA for the fourth quarter of 2024 was $1.7 million as compared to $(3.7) million for the fourth quarter of 2023. The increase of $5.4 million is primarily attributable to the increase in gross profit. 53 weeks ended February 3, 2024 Net revenues for the fiscal 2024 decreased by $8.6 million, or 1.1%, to $794.7 million, despite an additional week of net revenues of $10.0 million in fiscal 2024.  Comparable sales1, which include e-commerce net sales, decreased 3.2% during the fiscal 2024. The decrease in net revenues and comparable sales was primarily due to lower average transaction values and higher promotional activity. We believe that comparatively higher interest rates and inflation overall compared to the corresponding period last year negatively impacted consumer spending during the fiscal 2024. In fiscal 2023, following the lifting of pandemic restrictions, net revenues of $803.3 million were exceptional, as the Company leveraged pent-up demand for work and social gathering apparel, and successfully drove compelling marketing campaigns that led to an increase in store and e-commerce traffic, all with lower promotional activity.   Gross profit for fiscal 2024 decreased $20.4 million to $431.0 million as compared with $451.4 million for fiscal 2023, despite the inclusion of a 53rd week (instead of the normal 52 weeks) of $5.5 million. Gross profit as a percentage of net revenues for fiscal 2024 decreased to 54.2% from 56.2% for fiscal 2023. The decrease both in gross profit and as a percentage of net revenues is primarily attributable to higher markdowns and promotional activity in fiscal 2024 combined with an unfavourable foreign exchange impact of approximately $14.0 million on U.S. dollar denominated purchases included in cost of goods sold, partially offset by lower supply chain costs in  fiscal 2024. Adjusted ROA for fiscal 2024 was $22.0 million as compared to $45.7 million for the fiscal 2023. The decrease of $23.7 million is primarily attributable to the decrease in gross profit and the increase in operating costs. Net earnings for fiscal 2024 was $14.8 million ($0.30 basic and diluted earnings per share) as compared with $77.7 million ($1.59 basic and diluted earnings per share) for fiscal 2023. The decrease in net earnings of $62.9 million is primarily attributable to the Company's recognition of deferred income taxes in fiscal 2023, the decrease in gross profit and the increase in operating costs in fiscal 2024. Adjusted EBITDA for fiscal 2024 was $29.2 million as compared to $57.0 million for fiscal 2023. The decrease of $27.8 million is primarily attributable to the decrease in gross profit and the increase in operating costs. 1NON-GAAP Financial Measures & Supplementary Financial Measures This press announcement makes reference to certain non-GAAP measures. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. They are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for the Company's analysis of its financial information reported under IFRS. NON-GAAP Financial Measures This press announcement discusses the following non-GAAP financial measures: adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), and adjusted results from operating activities ("Adjusted ROA"). This press announcement also indicates Adjusted EBITDA as a percentage of net revenues and is considered a non-GAAP financial ratio. Net revenues represent the sale of merchandise less discounts and returns ("net sales"), and includes shipping fees charged to customers on e-commerce orders. The intent of presenting Adjusted EBITDA and Adjusted ROA is to provide additional useful information to investors and analysts. Adjusted EBITDA is currently defined as net earnings before income tax expense/recovery, interest income, interest expense, loss on foreign currency translation differences reclassified to net earnings, pension curtailment gain, depreciation, amortization, net impairment of non-financial assets, adjusted for the impact of certain items, including a deduction of interest expense and depreciation relating to leases accounted for under IFRS 16, Leases, Federal subsidies and restructuring recoveries/costs. Management believes that Adjusted EBITDA is an important indicator of the Company's ability to generate liquidity through operating cash flow to fund working capital needs and fund capital expenditures and uses this metric for this purpose. Management believes that Adjusted EBITDA as a percentage of net revenues indicates how much liquidity is generated for each dollar of net revenues. The exclusion of interest income and expenses, other than interest expense related to lease liabilities as explained hereafter, eliminates the impact on earnings derived from non-operational activities. The exclusion of depreciation, amortization and net impairment charges, other than depreciation related to right-of-use assets as explained hereafter, eliminates the non-cash impact, and the exclusion of restructuring recoveries /costs, Federal subsidies, loss on foreign currency translation differences reclassified to net earnings and pension curtailment gain presents the results of the on-going business. Under IFRS 16, Leases, the characteristics of some leases result in lease payments being recognized in net earnings in the period in which the performance or use occurs while other leases are recorded as right-of-use assets with a corresponding lease liability recognized, which results in depreciation of those assets and interest expense from those liabilities. Management is presenting its Adjusted EBITDA to reflect the payments of its store and equipment lease obligations on a consistent basis. As such, the initial add-back of depreciation of right-of-use assets and interest on lease obligations are removed from the calculation of Adjusted EDITDA, as this better reflects the operational cash flow impact of its leases. Adjusted ROA is defined as results from operating activities excluding Federal subsidies, restructuring recoveries/costs and pension curtailment gain. Management believes that Adjusted ROA provides a more relevant indicator in assessing current operational performance. The exclusion of restructuring recoveries /costs, pension curtailment gain and Federal subsidies presents the on-going operational performance of the business. Reconciliation of NON-IFRS Measures The tables below provide a reconciliation of net earnings to Adjusted EBITDA and results from operating activities to Adjusted ROA: For the fourth quarter of Year to date fiscal 2024 2023 2024 2023 Net earnings $    0.0 $  27.5 $  14.8 $  77.7 Depreciation, amortization and net impairment   losses on property and equipment, and   intangible assets 3.9 3.9 14.2 15.6 Depreciation on right-of-use assets 9.9 7.9 34.3 28.9 Interest expense on lease liabilities 2.4 1.3 7.6 4.9 Interest income (1.9) (1.5) (5.2) (2.0) Interest expense on revolving credit facility - - - 0.4 Income tax (recovery) expense (0.3) (31.7) 5.3 (32.1) Loss on foreign currency translation   differences reclassified to net earnings - - 1.0 - Pension curtailment gain - - (0.9) - Rent impact from IFRS 16, Leases1 (12.3) (9.2) (41.9) (33.8) Federal subsidies  - - - (1.2) Restructuring costs, net - (1.9) - (1.4) Adjusted EBITDA $    1.7 $   (3.7) $  29.2 $  57.0 Adjusted EBITDA as % of Net Revenues 0.8 % (1.7) % 3.7 % 7.1 % 1 Rent Impact from IFRS 16, Leases is comprised as follows; For the fourth quarter of Year to date fiscal 2024 2023 2024 2023 Depreciation on right-of-use assets $    9.9 $    7.9 $  34.3 $  28.9 Interest expense on lease liabilities 2.4 1.3 7.6 4.9 Rent impact from IFRS 16, Leases $  12.3 $    9.2 $  41.9 $  33.8 For the fourth quarter of Year to date fiscal 2024 2023 2024 2023 Results from operating activities $    0.5 $   (4.4) $  22.9 $  48.3 Pension curtailment gain  - - (0.9) - Federal subsidies - - - (1.2) Restructuring costs, net - (1.9) - (1.4) Adjusted ROA $    0.5 $   (6.3) $  22.0 $  45.7