Birks Group Reports FY2024 Holiday Period Sales Results

Rhea-AI Summary

Birks Group Inc. (BGI) reported an 8.1% increase in net sales and a 3.0% increase in comparable store sales for the 8-week interim sales period ended December 30th, 2023 (FY2024 Holiday Period) compared to the same period in FY2023. The sales growth was driven by strong performance in the retail sector, particularly in third-party branded watches, Chinook and Laval stores, and e-commerce sales. The company's President and CEO, Mr. Jean-Christophe Bédos, expressed satisfaction with the holiday sales results, emphasizing the commitment to customer service and strategic growth initiatives.

Insights

Market Research Analyst

The reported 8.1% increase in net sales during the FY2024 Holiday Period for Birks Group Inc. indicates a positive trend in consumer spending within the luxury retail sector. This growth, particularly in third-party branded watches and e-commerce, suggests a successful adaptation to market demands and consumer preferences. The renovation of key stores like Chinook and Laval, which contributed to the sales uplift, highlights the importance of strategic investment in retail spaces to enhance the shopping experience.

Moreover, the 3.0% rise in comparable store sales is a critical metric reflecting organic growth and customer loyalty. This metric is essential for investors as it strips out the impact of newly opened or closed stores, providing a more accurate picture of the company's performance. The emphasis on high-end luxury watches and jewellery and the growth of the Birks product brand, align with the broader industry trend of consumers gravitating towards premium products and experiences.

Financial Analyst

The financial performance of Birks Group during the critical holiday season suggests a robust financial position that could positively influence investor sentiment. The increase in sales is a strong signal of the company's revenue-generating capability. However, it's important to consider the operational costs associated with the reported growth, such as the expenses from store renovations and potential increases in marketing spend to drive e-commerce sales.

Investors should also monitor the gross margin trends to ensure that the sales growth translates into proportional profitability. It would be prudent to analyze the full financial statements upon their release to assess the impact on net income and cash flows. Such an analysis would provide a comprehensive understanding of the financial health and sustainability of the current growth trajectory.

Retail Industry Expert

The performance of Birks Group during the FY2024 Holiday Period can be seen as a microcosm of the luxury retail industry's resilience amidst various economic pressures. The company's focus on high-end products is a strategic move that capitalizes on the luxury market's relative insulation from economic downturns. The renovation of stores and the emphasis on e-commerce growth are indicative of the industry's shift towards omnichannel retailing, where the integration of online and offline experiences is critical for success.

The performance of branded watches and fine jewellery also reflects consumer confidence in luxury goods as a value-retaining investment, which is a sentiment often observed in uncertain economic climates. The emphasis on customer service excellence is another key factor driving repeat business and sustaining long-term growth in the luxury segment.

MONTREAL--(BUSINESS WIRE)-- Birks Group Inc. (the “Company” or “Birks Group”) (NYSE American: BGI), reported its sales results for the 8 week interim sales period ended December 30^th, 2023 (the “FY2024 Holiday Period”) resulting in an increase of 8.1% in net sales as compared to the same period in FY2023. Comparable store sales for the FY2024 Holiday Period increased by 3.0% as compared to the same period in FY2023.

The 8.1% increase in net sales for the FY2024 Holiday Period, as compared to the same period in FY2023, was driven primarily by a strong sales performance in the retail sector where third-party branded watches outperformed the sales during the comparable period in FY2023, the greater performance of our Chinook and Laval stores which were renovated in FY2023, and e-commerce sales growth. The 3.0% increase in comparable store sales in the FY2024 Holiday Period versus the same period in FY2023, was mainly attributable to the performance of both branded watches and Birks Fine Jewellery.

Mr. Jean-Christophe Bédos, President and Chief Executive Officer of Birks Group, commented: “Our sales teams have delivered remarkable results this holiday period, including significant sales growth over last year. This important achievement is a testament not only to our determination and commitment to our customers, but also to the continued implementation of our strategic plan. We remain focused on delivering excellence in customer service, growing our sales in the high-end luxury watch and jewellery market in Canada, and building on the success of our Birks product brand. I am pleased with our Holiday Sales results and would like to sincerely thank all our employees for their continued perseverance and dedication.”

Comparable Store Sales

We use comparable store sales as a key performance measure for our business. Comparable store sales include stores open in the same period in both the current and prior period. We include e-commerce sales in our comparable store sales calculations. Stores enter the comparable store calculation in their thirteenth full month of operation under our ownership. Stores that have been resized or relocated are evaluated on a case-by-case basis to determine if they are functionally the same store or a new store and then are included or excluded from comparable store sales, accordingly. Comparable store sales measure the percentage change in net sales for comparable stores in a period compared to the corresponding period in the previous year. If a comparable store is not open for the entirety of both periods, comparable store sales measure the change in net sales for the portion of time that such store was open in both periods. We believe that this measure provides meaningful information on our performance and operating results. However, readers should know that this financial measure has no standardized meaning and may not be comparable to similar measures presented by other companies.

About Birks Group Inc.

Birks Group is a leading designer of fine jewellery, and operator of luxury jewellery, timepieces and gifts retail stores in Canada. The Company operates 21 stores under the Maison Birks brand in most major metropolitan markets in Canada, one retail location in Calgary under the Brinkhaus brand, one retail location in Vancouver operated under the Graff brand, one retail location in Vancouver under the Patek Philippe brand, and one retail location in Laval under the Breitling brand. Birks brand fine jewellery collections are also available through select SAKS Fifth Avenue stores in Canada and the U.S., select Mappin & Webb and Goldsmiths locations in the United Kingdom, in Mayors stores in the United States, in W. Kruk stores in Poland as well as several jewellery retailers across North America. Birks was founded in 1879 and has become Canada’s premier retailer and designer of fine jewellery, timepieces and gifts. Additional information can be found on Birks’ web site, www.birks.com.

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,” “continue,” “strategy,” “focus” and other words of similar meaning. All statements that address expectations, possibilities or projections about the future are forward-looking statements, including without limitation, statements about anticipated economic conditions, and our strategies for growth, performance drivers, expansion plans, sources or adequacy of capital, expenditures and financial results, , as well as statements regarding our continued focus on delivering excellence in customer service, growing our sales in the high-end luxury watch and jewellery market in Canada, and building on the success of our Birks product brand.

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 Canada and the U.S., which could adversely affect the Company’s business, operating results or financial condition, including its revenue and profitability, through the impact of changes in the real estate markets, changes in the equity markets and decreases in consumer confidence and the related changes in consumer spending patterns, the impact on store traffic, tourism and sales; (iii) the impact of fluctuations in foreign exchange rates, inflation, increases in commodity prices and borrowing or operating costs, or other pricing environment factors and their related impact on the Company’s costs and expenses; (iv) changes in interest rates; (v) the Company’s ability to maintain and obtain sufficient sources of liquidity to fund its operations, to achieve planned sales, gross margin and net income, to keep costs low, to implement its business strategy, maintain relationships with its primary vendors, to mitigate fluctuations in the availability and prices of the Company’s merchandise, to compete with other jewelers, to succeed in its marketing initiatives (including with respect to Birks branded products), and to have a successful customer service program; (vi) the Company’s plan to evaluate the productivity of existing stores, close unproductive stores and open new stores in prime retail locations, and invest in its website and e-commerce platform; (vii) the Company’s ability to continue to borrow under the Amended Credit Facility and Amended Term Loan; (viii) the Company’s ability to maintain profitable operations, as well as maintain specified excess availability levels under the Amended Credit Facility, make scheduled payments of principal and interest, and fund capital expenditures; (ix) the Company’s ability to execute its strategic vision; (x) the geopolitical environment and increased political uncertainty; (xi) the impact of weather-related incidents, natural disasters, strikes, protests, riots or terrorism, acts of war or another public health crisis or disease outbreak, epidemic or pandemic on the Company’s business; and (xii) the Company’s ability to continue as a going concern.

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 23, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240111608251/en/

Company:

Katia Fontana

Vice President and Chief Financial Officer

(514) 397-2592

For all press and media inquiries, please contact:

OverCat Communications

Audrey Hyams Romoff, ahr@overcat.com, (647) 223-9970

Chelsea Brooks, cb@overcat.com, (289) 221-6006

Source: Birks Group Inc.

FAQ

What were the net sales results reported by Birks Group Inc. for the FY2024 Holiday Period?

Birks Group Inc. reported an 8.1% increase in net sales for the FY2024 Holiday Period compared to the same period in FY2023.

What was the percentage increase in comparable store sales for Birks Group Inc. during the FY2024 Holiday Period?

Birks Group Inc. reported a 3.0% increase in comparable store sales for the FY2024 Holiday Period compared to the same period in FY2023.

What factors contributed to the increase in net sales for Birks Group Inc. during the FY2024 Holiday Period?

The increase in net sales was primarily driven by strong sales performance in the retail sector, particularly in third-party branded watches, Chinook and Laval stores, and e-commerce sales.

What did the President and CEO of Birks Group Inc. say about the holiday sales results?

Mr. Jean-Christophe Bédos expressed satisfaction with the holiday sales results, emphasizing the commitment to customer service and strategic growth initiatives.

What is the key performance measure used by Birks Group Inc. for its business?

Birks Group Inc. uses comparable store sales as a key performance measure, including e-commerce sales in the calculations.