Birks Group Reports Fiscal 2023 Results
Highlights
All figures presented herein are in Canadian dollars.
For the year ended March 25, 2023, the Company delivered year-over-year comparable store sales growth of
Mr. Jean-Christophe Bédos, President and Chief Executive Officer of Birks Group, commented: “During fiscal 2023, we achieved a
Mr. Bédos further commented: “The results achieved in fiscal 2023, despite a challenging economic environment in the back half of the year, is a testament to our team’s unwavering commitment to our customers. I would like to thank our teams for their tireless efforts. While in the near-term we continue to run our business in an agile manner given the current economic environment, looking beyond, we remain committed to our long-term vision to generate sustainable, long-term shareholder value.”
Financial overview for the fiscal year ended March 25, 2023:
Total net sales for fiscal 2023 were
-
Comparable store sales increased by
2.9% in fiscal 2023 compared to fiscal 2022. The increase was experienced across both the branded jewelry and branded timepieces categories, with such product categories benefitting from the Company’s improving third party brand portfolio and client offering. Furthermore, the comparable store sales increase was influenced by an increase in average sales transaction value, partially offset by a slight decrease in volume. For fiscal 2023, the Company’sVancouver flagship store is excluded from the calculation of comparable store sales as a result of the RMBG Joint Venture;
-
Total gross profit for fiscal 2023 was
, or$68.0 million 41.7% of net sales, compared to , or$76.2 million 42.0% of net sales in fiscal 2022. This decrease in gross profit is partially attributable to the exclusion of the gross profit now attributable to RMBG as well as by an increase in foreign exchange losses ( in fiscal 2023,$1.4 million in fiscal 2022) incurred during the period, partially offset by the impact of the$0.2 million 2.9% increase in comparable store sales experienced during fiscal 2023. The decrease of 30 basis points in gross margin percentage was primarily impacted by the increase in foreign exchange losses recognized within cost of sales, partially offset by the Company’s adjusted pricing strategy on the Birks branded products, and its strategic focus to reduce sales promotions and discounting;
SG&A expenses in fiscal 2023 were
-
The Company’s EBITDA (1) for fiscal 2023 was
, a decrease of$3.8 million , compared to EBITDA(1) of$6.5 million for fiscal 2022;$10.3 million
-
The Company’s reported operating loss for fiscal 2023 was
, a decrease of$3.8 million , compared to a reported operating income of$8.3 million for fiscal 2022;$4.5 million
-
The Company’s recognized interest and other financing costs of
in fiscal 2023, an increase of$5.6 million , compared to interest and other financing costs of$2.4 million in fiscal 2022. This increase is driven from an increase on our average borrowing rate on our debt as well as a foreign exchange loss of$3.2 million in fiscal 2023 versus a foreign exchange gain of$0.5 million in fiscal 2022 on our$0.1 million U.S. dollar denominated debt;
-
The Company recognized a net loss for fiscal 2023 of
, or$7.4 million per share, compared to a net income for fiscal 2022 of$0.40 , or$1.3 million per share.$0.07
(1) This is a non-GAAP financial measure defined below under “Non-GAAP Measures” and accompanied by a reconciliation to the most directly comparable GAAP financial measure.
Investment in RMBG Joint Venture
In April of 2021, the Company entered into a joint venture with FWI to form RMBG. During the 2023 fiscal year, the joint venture became operational. RMBG operates a boutique in
About Birks Group Inc.
Birks Group is a leading designer of fine jewelry, and operator of luxury jewelry, timepieces and gifts retail stores in
NON-GAAP MEASURES
The Company reports financial information in accordance with
EBITDA
“EBITDA” is defined as net income (loss) from continuing operations before interest expense and other financing costs, income taxes expense (recovery) and depreciation and amortization.
EBITDA
For the fiscal year ended |
||||||
March 25, 2023 |
March 26, 2022 |
|||||
Net (loss) income ( |
|
(7,432) |
|
1,287 |
||
as a % of net sales |
|
- |
|
|
||
Add the impact of: |
||||||
Interest expense and other financing costs |
|
5,581 |
|
3,182 |
||
Depreciation and amortization |
|
5,673 |
|
5,809 |
||
EBITDA (non-GAAP measure) |
$ |
3,822 |
$ |
10,278 |
||
as a % of net sales |
|
|
|
|
Forward Looking Statements
This press release contains forward- looking statements which can be identified by their use of words like “plans,” “expects,” “believes,” “will,” “anticipates,” “intends,” “projects,” “estimates,” “could,” “would,” “may,” “planned,” “goal,” and other words of similar meaning. All statements that address expectations, possibilities or projections about the future, including without limitation, statements about anticipated economic conditions, generation of shareholder value, and our strategies for growth, performance drivers, expansion plans, sources or adequacy of capital, expenditures and financial results are forward-looking statements.
Because such statements include various risks and uncertainties, actual results might differ materially from those projected in the forward- looking statements and no assurance can be given that the Company will meet the results projected in the forward-looking statements. These risks and uncertainties include, but are not limited to the following: (i) a decline in consumer spending or deterioration in consumer financial position; (ii) economic, political and market conditions, including the economies of
Information concerning factors that could cause actual results to differ materially is set forth under the captions “Risk Factors” and “Operating and Financial Review and Prospects” and elsewhere in the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on June 22, 2023 and subsequent filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this statement or to reflect the occurrence of unanticipated events, except as required by law.
BIRKS GROUP INC. |
|||||||
CONSOLIDATED STATEMENTS OF OPERATIONS – AUDITED |
|||||||
(In thousands, except per share amounts) |
|||||||
|
Fiscal year ended |
Fiscal year ended |
|||||
|
March 25, 2023 |
March 26, 2022 |
|||||
Net sales |
$ |
162,950 |
|
$ |
181,342 |
||
Cost of sales |
|
94,990 |
|
|
105,122 |
||
Gross profit |
|
67,960 |
|
|
76,220 |
||
Selling, general and administrative expenses |
|
66,095 |
|
|
65,942 |
||
Depreciation and amortization |
|
5,673 |
|
|
5,809 |
||
Total operating expenses |
|
71,768 |
|
|
71,751 |
||
Operating (loss) income |
|
(3,808 |
) |
|
4,469 |
||
|
|
|
|||||
|
|
|
|||||
Interest and other financial costs |
|
5,581 |
|
|
3,182 |
||
(Loss) income before taxes and equity in earnings of joint venture |
|
(9,389 |
) |
|
1,287 |
||
Income taxes (benefits) |
|
— |
|
|
— |
||
Equity in earnings of joint venture, net of taxes |
|
1,957 |
|
|
— |
||
|
|
|
|||||
Net (loss) income |
|
(7,432 |
) |
|
1,287 |
||
|
|
|
|||||
Weighted average common shares outstanding |
|
|
|||||
Basic |
|
18,692 |
|
|
18,346 |
||
Diluted |
|
18,692 |
|
|
18,794 |
||
Net (loss) income per common share |
|
|
|||||
Basic |
$ |
(0.40 |
) |
$ |
0.07 |
||
Diluted |
$ |
(0.40 |
) |
$ |
0.07 |
BIRKS GROUP INC. |
||||||||
AUDITED CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands) |
||||||||
|
March 25, 2023 |
March 26, 2022 |
||||||
Assets |
|
|
||||||
Current Assets |
|
|
||||||
Cash and cash equivalents |
$ |
1,262 |
|
$ |
2,013 |
|
||
Accounts receivable and other receivables |
|
11,377 |
|
|
8,037 |
|
||
Inventories |
|
88,357 |
|
|
78,907 |
|
||
Prepaid expenses and other current assets |
|
2,694 |
|
|
1,822 |
|
||
Total current assets |
|
103,690 |
|
|
90,779 |
|
||
Long-term receivables |
|
2,000 |
|
|
5,599 |
|
||
Equity investment in joint venture |
|
1,957 |
|
|
— |
|
||
Property and equipment |
|
26,837 |
|
|
22,781 |
|
||
Operating lease right-of-use asset |
|
55,498 |
|
|
58,071 |
|
||
Intangible assets and other assets |
|
6,999 |
|
|
6,031 |
|
||
Total non-current assets |
|
93,291 |
|
|
92,482 |
|
||
Total assets |
$ |
196,981 |
|
$ |
183,261 |
|
||
|
|
|
||||||
Liabilities and Stockholders’ Equity |
|
|
||||||
Current liabilities |
|
|
||||||
|
|
|
||||||
Bank indebtedness |
$ |
57,890 |
|
$ |
43,157 |
|
||
Accounts payable |
|
37,645 |
|
|
28,291 |
|
||
Accrued liabilities |
|
7,631 |
|
|
8,340 |
|
||
Current portion of long-term debt |
|
2,133 |
|
|
2,129 |
|
||
Current portion of operating lease liabilities |
|
6,758 |
|
|
6,963 |
|
||
Total current liabilities |
|
112,057 |
|
|
88,880 |
|
||
Long-term debt |
|
22,180 |
|
|
21,371 |
|
||
Long-term portion of operating lease liabilities |
|
62,989 |
|
|
66,757 |
|
||
Other long-term liabilities |
|
358 |
|
|
389 |
|
||
Total long-term liabilities Stockholders’ equity: |
|
85,527 |
|
|
88,517 |
|
||
Class A common stock – no par value, unlimited shares authorized, issued and outstanding 11,012,999 (10,795,443 as of March 26, 2022) |
|
39,019 |
|
|
37,883 |
|
||
Class B common stock – no par value, unlimited shares authorized, issued and outstanding 7,717,970 |
|
57,755 |
|
|
57,755 |
|
||
Preferred stock – no par value, Unlimited shares authorized, none issued |
|
— |
|
|
— |
|
||
Additional paid-in capital |
|
23,504 |
|
|
23,669 |
|
||
Accumulated deficit |
|
(120,845 |
) |
|
(113,413 |
) |
||
Accumulated other comprehensive loss |
|
(36 |
) |
|
(30 |
) |
||
Total stockholders’ deficiency |
|
(603 |
) |
|
5,864 |
|
||
Total liabilities and stockholders’ deficiency |
$ |
196,981 |
|
$ |
183,261 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230622885721/en/
Company:
Katia Fontana
Vice President and Chief Financial Officer
(514) 397-2592
For all press and media inquiries:
OverCat Communications
Audrey Hyams Romoff, ahr@overcat.com, (647) 223-9970
Chelsea Brooks, cb@overcat.com, (289) 221-6006
Source: Birks Group Inc.