Canadian lifestyle brand Roots faced a 9% sales decrease in the third quarter, marking a significant shift in its financial performance. The report, released on Wednesday, reveals sales dropping to $63.5 million for the quarter ending October 28, 2023, a notable decline from the $69.8 million reported during the same period in 2022.
Direct-to-consumer sales, inclusive of corporate retail store and e-commerce transactions, reached $52.2 million. This represents an 8.2% year-over-year decrease, primarily attributed to a substantial decline in off-price sales. However, a noteworthy 3% increase in full-price sales helped offset the overall decline.
P&O sales, encompassing wholesale branded products and licensing agreements, totaled $11.3 million, showing a significant 12.3% decrease. This decline can be partially attributed to timing shifts in custom Roots-branded product sales and reduced wholesale orders.
The net loss for the quarter amounted to $0.5 million, translating to $0.01 per share. This contrasts with the $2.2 million net loss, equivalent to $0.05 per share, reported in Q3 2022.
Meghan Roach, Roots’ President & CEO, commented on the results, stating, «Our full-priced sales have demonstrated resilience, emphasizing the appeal of our latest products and the success of intensified marketing strategies in the third quarter. However, prevailing economic headwinds have altered consumer spending patterns. Despite maintaining promotional discipline, influencing off-price sales dynamics remained a challenge.»
Year-to-date total sales stand at $154.4 million, indicating a 3.9% decline compared to the first nine months of fiscal 2022. Net income loss is reported at $12.8 million, or $0.31 per share, in contrast to $6.3 million, or $0.15 per share, from the previous year.
In a recent development, Leslie Golts assumed the role of Roots’ new Chief Marketing Officer in the past month. Earlier this year, Joey Gollish was appointed Creative Director in Residence.
This performance update reflects Roots’ strategic challenges and opportunities amid evolving market dynamics, laying the groundwork for potential shifts in the brand’s approach and positioning.
