Birks Group Reports Mid-Year Fiscal 2023 Results
Birks Group reported financial results for the twenty-six week period ending September 24, 2022, showing an 8.2% increase in comparable store sales and a gross margin improvement of 110 basis points. However, net sales decreased by 5.4% to $80.0 million, compared to $84.6 million in the prior year, largely due to the RMBG joint venture. Gross profit also fell by 2.9% to $33.9 million, and a net loss of $2.0 million was reported, translating to a loss per share of ($0.11).
- Comparable store sales up 8.2%
- Gross margin improved by 110 basis points
- Net sales decreased by 5.4% to $80.0 million
- Gross profit declined by 2.9% to $33.9 million
- Reported a net loss of $2.0 million or ($0.11) per share
The Company delivered an
Highlights
All figures presented herein are in Canadian dollars.
In the twenty-six week period ended
In the twenty-six week period ended
Mr. Jean-Christophe Bédos, President and Chief Executive Officer of
Mr. Bédos further commented: “These results were achieved despite uncertain macroeconomic conditions. It is thanks to our team’s continuous dedication to our customers that we were able to achieve these results. I believe that our Company is in a strong position to achieve its long-term strategic objectives as we continue to run our business in an agile manner in the near-term, with a clear view and focus on long-term growth.”
Financial overview for the twenty-six week period ended
-
Total net sales for the twenty-six week period ended
September 24, 2022 were compared to$80.0 million in the twenty-six week period ended$84.6 million September 25, 2021 , which is a decrease of , or$4.6 million 5.4% . Net retail sales were lower than the comparable prior year period, attributable primarily to the exclusion of the sales of RMBG , partially offset by an$3.9 million 8.2% increase in comparable store sales; -
Comparable store sales increased by
8.2% compared to the twenty-six week period endedSeptember 25, 2021 . The increase in comparable store sales is in part due to the reduced impact of COVID-19 (including government-mandated temporary store closures, traffic declines and capacity limitations) experienced by the Company during the period as compared to during the twenty-six week period endedSeptember 25, 2021 . No shopping days were lost due to temporary store closures during the twenty-six week period endedSeptember 24, 2022 , as compared to approximately17% during the twenty-six week period endedSeptember 25, 2021 . This increase was experienced across all product categories, with branded jewelry and branded timepiece products benefitting from the Company’s continuously improving third party brand portfolio and client offering. The increase in comparable store sales was also derived from the performance of the Birks fine jewelry and bridal collections driven by the impact of pointed digital marketing campaigns, increases in average sales transaction value, and increased in-store foot traffic. For the twenty-six week period endedSeptember 24, 2022 , the Company’s Vancouver Flagship store is excluded from the calculation of comparable store sales as a result of the RMBG Joint Venture; -
Total gross profit was
, or$33.9 million 42.3% of net sales, for the twenty-six week period endedSeptember 24, 2022 compared to or$34.9 million 41.2% of net sales for the twenty-six week period endedSeptember 25, 2021 . This decrease in gross profit is partially attributable to the exclusion of the gross profit of RMBG, partially offset by the8.2% increase in comparable store sales experienced during the period, as well as by an improvement in gross margin of 110 basis points. The increase of 110 basis points in gross margin percentage was mainly attributable to the Company’s adjusted pricing strategy on the Birks branded products, as well as its strategic focus to reduce sales promotions and discounting, partially offset by foreign currency losses experienced in the period; -
SG&A expenses in the twenty-six week period ended
September 24, 2022 were , or$31.9 million 39.9% of net sales, compared to , or$28.9 million 34.1% of net sales in the twenty-six week period endedSeptember 25, 2021 , an increase of . This increase is primarily related to the reduced impact of COVID-19 (including government-mandated temporary store lockdowns, traffic declines and capacity limitations) experienced by the Company during the period as compared to the twenty-six week period ended$3.0 million September 25, 2021 , and therefore there were less opportunities for cost containment initiatives available to management in response to the pandemic. The drivers of the increase in SG&A expenses in the period include greater occupancy costs ( ) as a result of the re-opening of stores and expiring non-recurring rent abatements in the twenty-six week period ended$0.6 million September 25, 2021 , greater compensation costs ( ), higher general operating costs and variable costs ($0.4 million ), lower wage subsidies ($0.7 million ) and rent subsidies ($0.6 million ), as well as greater stock-based compensation ($0.4 million ) driven by gains recorded on the revaluation of cash-settled DSU and RSU instruments in the twenty-six week period ended$1.1 million September 25, 2021 which did not reoccur in the twenty-six week period endedSeptember 24, 2022 , partially offset by lower marketing costs ( ). As a percentage of sales, SG&A expenses in the twenty-six week period ended$0.8 million September 24, 2022 have increased by 580 basis points as compared to the twenty-six week period endedSeptember 25, 2021 ; -
The Company’s EBITDA (1) for twenty-six week period ended
September 24, 2022 was , a decrease of$2.9 million , compared to EBITDA(1) of$3.1 million for the twenty-six week period ended$6.0 million September 25 2021 ; -
The Company reported an operating loss for the twenty-six week period ended
September 24, 2022 of , a decrease of$0.7 million , compared to a reported operating income of$3.3 million in the twenty-six week period ended$2.7 million September 25, 2021 ; and -
The Company recognized a net loss for the twenty-six week period ended
September 24, 2022 of , or ($2.0 million ) per share, compared to net income for the twenty-six week period ended$0.11 September 25, 2021 of , or$1.0 million per share.$0.05
(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
About
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 twenty-six week period ended |
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|
|
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Net (loss) income ( |
|
(1,996) |
|
990 |
||
as a % of net sales |
|
- |
|
|
||
Add the impact of: |
||||||
Interest expense and other financing costs |
|
2,266 |
|
1,684 |
||
Depreciation and amortization |
|
2,620 |
|
3,324 |
||
EBITDA (non-GAAP measure) |
$ |
2,890 |
$ |
5,998 |
||
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, availability under our Amended Credit Facility and Amended Term Loan, anticipated distributions of profits, 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) the magnitude and length of economic disruption as a result of the worldwide COVID-19 outbreak, including its impact on macroeconomic conditions, generally, as well as its impact on the results of operations and financial condition of the Company and the trading price of the shares; (ii) general 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
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED |
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(In thousands, except per share amounts) |
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26 weeks ended |
26 weeks ended |
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|
|
|
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Net sales |
$ |
80,040 |
$ |
84,615 |
||
Cost of sales |
|
46,170 |
|
49,731 |
||
Gross profit |
|
33,870 |
|
34,884 |
||
Selling, general and administrative expenses |
|
31,923 |
|
28,886 |
||
Depreciation and amortization |
|
2,620 |
|
3,324 |
||
Total operating expenses |
|
34,543 |
|
32,210 |
||
Operating (loss) income |
|
(673) |
|
2,674 |
||
|
|
|
||||
|
|
|
||||
Interest and other financial costs |
|
2,266 |
|
1,684 |
||
(Loss) income before taxes and equity in earnings of joint venture |
|
(2,939) |
|
990 |
||
Income taxes (benefits) |
|
— |
|
— |
||
Equity in earnings of joint venture, net of taxes |
|
943 |
|
— |
||
|
|
|
||||
Net (loss) income |
|
(1,996) |
|
990 |
||
|
|
|
||||
Weighted average common shares outstanding |
|
|
||||
Basic |
|
18,627 |
|
18,329 |
||
Diluted |
|
18,627 |
|
18,634 |
||
Net (loss) income per common share |
|
|
||||
Basic |
$ |
(0.11) |
$ |
0.05 |
||
Diluted |
$ |
(0.11) |
$ |
0.05 |
|
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In thousands) |
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|
|
|
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Assets |
|
|
|
|||
Current Assets |
|
|
|
|||
Cash and cash equivalents |
$ |
1,576 |
|
$ |
2,013 |
|
Accounts receivable and other receivables |
|
12,117 |
|
|
8,037 |
|
Inventories |
|
77,881 |
|
|
78,907 |
|
Prepaid expenses and other current assets |
|
2,660 |
|
|
1,822 |
|
Total current assets |
|
94,234 |
|
|
90,779 |
|
Long-term receivables |
|
3,642 |
|
|
5,599 |
|
Equity investment in joint venture |
|
943 |
|
|
— |
|
Property and equipment |
|
24,581 |
|
|
22,781 |
|
Operating lease right-of-use asset |
|
57,421 |
|
|
58,071 |
|
Intangible assets and other assets |
|
5,963 |
|
|
6,031 |
|
Total non-current assets |
|
92,550 |
|
|
92,482 |
|
Total assets |
$ |
186,784 |
|
$ |
183,261 |
|
|
|
|
|
|||
Liabilities and Stockholders’ Equity |
|
|
|
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Current liabilities |
|
|
|
|||
|
|
|
|
|||
Bank indebtedness |
$ |
51,718 |
|
$ |
43,157 |
|
Accounts payable |
|
26,880 |
|
|
28,291 |
|
Accrued liabilities |
|
6,828 |
|
|
8,340 |
|
Current portion of long-term debt |
|
2,134 |
|
|
2,129 |
|
Current portion of operating lease liabilities |
|
6,839 |
|
|
6,963 |
|
Total current liabilities |
|
94,399 |
|
|
88,880 |
|
Long-term debt |
|
22,019 |
|
|
21,371 |
|
Long-term portion of operating lease liabilities |
|
65,613 |
|
|
66,757 |
|
Other long-term liabilities |
|
373 |
|
|
389 |
|
Total long-term liabilities Stockholders’ equity: |
|
88,005 |
|
|
88,517 |
|
Class A common stock – no par value, unlimited shares authorized, issued and outstanding 11,012,999 (10,795,443 as of |
|
38,520 |
|
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 |
|
23,625 |
|
23,669 |
||
Accumulated deficit |
|
(115,409) |
|
(113,413) |
||
Accumulated other comprehensive loss |
|
(111) |
|
(30) |
||
Total stockholders’ deficiency |
|
4,380 |
|
5,864 |
||
Total liabilities and stockholders’ deficiency |
$ |
186,784 |
$ |
183,261 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221130006029/en/
Company Contacts:
Vice President and Chief Financial Officer
(514) 397-2592
For all press and media inquiries, please contact:
Source:
FAQ
What were Birks Group's comparable store sales for the period ending September 24, 2022?
How did Birks Group's net sales change in the recent financial report?
What was the net loss reported by Birks Group for the twenty-six week period ended September 24, 2022?