Sales were $37.5 million compared to $41.5 million in Q1 2023 DTC sales were $31.4 million compared to $35.4 million in Q1 2023, driven by lower off-price sales year-over-year, due to the improved inventory position Gross margin was 59.0%, flat to Q1 2023 DTC gross margin increased to 62.1% from 61.3%, driven by improved product costing and lower discounting Net income (loss) totaled ($8.9) million compared to ($8.0) million in Q1 2023 Adjusted EBITDA amounted to ($8.0) million versus ($5.8) million in Q1 2023 Free cash flow was ($14.6) million, improving from ($14.9) million in Q1 2023 Net debt reduced 22.7% year-over-year to $31.7 million Inventory was $35.4 million, a 30% reduction compared to $50.4 million in Q1 2023 TORONTO, June 10, 2024 /CNW/ - Roots ("Roots," "Roots Canada" or the "Company") (TSX:ROOT), a premium outdoor-lifestyle brand, announced today financial results for its first quarter ended May 4, 2024 ("Q1 2024"). All financial results are reported in Canadian dollars unless otherwise stated. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures. See "Non-IFRS Measures and Industry Metrics" below. "We made significant progress on our strategic initiatives this quarter, marked by robust direct-to-consumer margin growth, reduced debt, and enhanced liquidity and free cash flow on a year-over-year basis. We also recently launched our brand ambassador program and debuted our AI-driven replenishment system, which will positively enhance our operations, customer experience, and engagement," stated Meghan Roach, President & CEO of Roots Corporation. "Our disciplined approach to inventory management resulted in fewer markdown sales, which created short-term downward pressure on revenue in the first quarter. However, we continued to see positive momentum in many product lines, including solid growth in our adult activewear collection." SELECT FINANCIAL INFORMATION (in '000s of CAD$, except where noted) First quarter ended May 4, 2024 April 29, 2023 Change Total sales 37,461 41,496 (9.7 %) Direct-to-Consumer ("DTC") sales 31,405 35,406 (11.3 %) Partners & Other ("P&O") sales 6,056 6,090 (0.6 %) Gross profit 22,101 24,481 (9.7 %) Gross margin1 59.0 % 59.0 % - Selling, General and Administrative ("SG&A") expenses 31,982 33,006 (3.1 %) Net income (loss) (8,895) (7,966) (11.7 %) Net income (loss) per share  ($0.22) ($0.19) (15.8 %) Adjusted EBITDA2 (7,959) (5,848) (36.1 %) Free Cash Flow3 (14,613) (14,871) +1.7 % 1 Gross margin is a supplementary financial measure that measures our gross profit as a percentage of sales. 2