Birks Group Inc. Reports Fiscal 2024 Results
Highlights
All figures presented herein are in Canadian dollars.
For the year ended
Mr. Jean-Christophe Bédos, President and Chief Executive Officer of
Mr. Bédos further commented: “Despite a challenging economic environment throughout the year including ongoing inflationary and interest rates pressure, the result achieved in fiscal 2024 is a testament to our team’s commitment to our customers. I am grateful for the unwavering efforts of all our employees and the excellent execution of our initiatives during this past year. 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
-
Total net sales for fiscal 2024 were
$185.3 million compared to$163.0 million in fiscal 2023, an increase of$22.3 million , or 13.7%. The increase in net sales in fiscal 2024 was primarily driven by the results of the Company’s retail channel. Net retail sales were$20.4 million higher than fiscal 2023, an increase primarily driven by the strong performance of third party branded timepieces and jewelry throughout the retail network, including at the newly renovated Chinook andLaval stores, partially offset by a decrease in the Birks product brand sales;
- Comparable store sales increased by 7.5% in fiscal 2024 compared to fiscal 2023, mainly driven by strong third party branded timepiece sales and by an increase in average sales transaction value, partially offset by a decrease in Birks product brand sales;
-
Total gross profit for fiscal 2024 was
$73.6 million , or 39.7% of net sales, compared to$68.0 million , or 41.7% of net sales in fiscal 2023. The increase in gross profit was primarily driven by increased sales volume experienced during fiscal 2024 due to strong third party branded timepieces and jewelry sales, partially offset by higher product and packaging costs. The decrease of 200 basis points in gross margin percentage resulted primarily from the sales mix with increased sales from third party branded timepieces and jewelry, partially offset by lower promotions and discounts;
-
SG&A expenses in fiscal 2024 were
$65.7 million , or 35.5% of net sales, compared to$66.1 million , or 40.6% of net sales in fiscal 2023, a decrease of$0.4 million . The main drivers of the decrease in SG&A expenses in fiscal 2024 include lower marketing costs ($1.3 million ) and lower non-cash stock based compensation expense ($2.0 million ) due to the fluctuations in the Company’s stock price during the fiscal year, offset by higher compensation costs ($1.5 million ) primarily due to longer store opening hours compared to fiscal 2023, higher credit card costs ($1.1 million ) due to higher costs on private label credit cards and proprietary credit cards, higher occupancy costs ($0.4 million ) and higher general operating costs and variable costs ($0.3 million ). As a percentage of sales, SG&A expenses in fiscal 2024 decreased by 510 basis points as compared to fiscal 2023;
-
The Company’s EBITDA(1) for fiscal 2024 was
$10.0 million , an increase of$6.2 million , compared to an EBITDA(1) of$3.8 million for fiscal 2023;
-
The Company’s reported operating income for fiscal 2024 was
$1.2 million , an increase of$5.0 million , compared to a reported operating loss of$3.8 million for fiscal 2023;
-
The Company’s recognized interest and other financing costs were
$8.0 million in fiscal 2024, an increase of$2.4 million , compared to recognized interest and other financing costs of$5.6 million in fiscal 2023. This increase is due to an increase in our average borrowing rate on our debt, an increase in the average amount outstanding on our revolver credit facility, and additional borrowings, partially offset by a foreign exchange gain of$0.2 million in fiscal 2024 compared to a foreign exchange loss of$0.5 million in fiscal 2023 on ourU.S. dollar denominated debt;
-
The Company recognized a net loss for fiscal 2024 of
$4.6 million , or$0.24 per share, compared to a net loss for fiscal 2023 of$7.4 million , or$0.40 per share.
(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. |
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 (in thousands) |
|||||||
For the fiscal year ended |
|||||||
|
|
||||||
Net (loss) income ( |
$ |
(4,631 |
) |
$ |
(7,432 |
) |
|
as a % of net sales |
|
-2.5 |
% |
|
-4.6 |
% |
|
Add the impact of: |
|||||||
Interest expense and other financing costs |
|
8,007 |
|
|
5,581 |
|
|
Depreciation and amortization |
|
6,639 |
|
|
5,673 |
|
|
EBITDA (non-GAAP measure) |
$ |
10,015 |
|
$ |
3,822 |
|
|
as a % of net sales |
|
5.4 |
% |
|
2.3 |
% |
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
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) |
||||||||
Consolidated Statements of Operations |
|
|
||||||
|
Fiscal Year Ended |
|||||||
|
|
|
||||||
Net sales |
$ |
185,275 |
|
$ |
162,950 |
|
||
Cost of sales |
|
111,720 |
|
|
94,990 |
|
||
Gross profit |
|
73,555 |
|
|
67,960 |
|
||
Selling, general and administrative expenses |
|
65,705 |
|
|
66,095 |
|
||
Depreciation and amortization |
|
6,639 |
|
|
5,673 |
|
||
Total operating expenses |
|
72,344 |
|
|
71,768 |
|
||
Operating income (loss) |
|
1,211 |
|
|
(3,808 |
) |
||
Interest and other financial costs |
|
8,007 |
|
|
5,581 |
|
||
Income (loss) before taxes and equity in earnings of joint venture |
|
(6,796 |
) |
|
(9,389 |
) |
||
Income taxes (benefits) |
|
— |
|
|
— |
|
||
Equity in earnings of joint venture, net of taxes of |
|
2,165 |
|
|
1,957 |
|
||
Net (loss) income, net of tax |
$ |
(4,631 |
) |
$ |
(7,432 |
) |
||
|
|
|
||||||
Weighted average common shares outstanding: |
|
|
||||||
Basic |
|
19,058 |
|
|
18,692 |
|
||
Diluted
|
|
19,058 |
|
|
18,692 |
|
||
Net (loss) income per common share: |
|
|
||||||
Basic |
$ |
(0.24 |
) |
$ |
(0.40 |
) |
||
Diluted |
|
(0.24 |
) |
|
(0.40 |
) |
CONSOLIDATED BALANCE SHEETS (In thousands) |
|||||||
As of |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Current Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
1,783 |
|
|
$ |
1,262 |
|
Accounts receivable and other receivables |
|
8,455 |
|
|
|
11,377 |
|
Inventories |
|
99,067 |
|
|
|
88,357 |
|
Prepaids and other current assets |
|
2,913 |
|
|
|
2,694 |
|
Total current assets |
|
112,218 |
|
|
|
103,690 |
|
Long-term receivables |
|
1,571 |
|
|
|
2,000 |
|
Equity investment in joint venture |
|
4,122 |
|
|
|
1,957 |
|
Property and equipment |
|
25,717 |
|
|
|
26,837 |
|
Operating lease right-of-use asset |
|
51,753 |
|
|
|
55,498 |
|
Intangible assets and other assets |
|
7,887 |
|
|
|
6,999 |
|
Total non-current assets |
|
91,050 |
|
|
|
93,291 |
|
Total assets |
$ |
203,268 |
|
|
$ |
196,981 |
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity (Deficiency) |
|
|
|
||||
Current liabilities |
|
|
|
||||
Bank indebtedness |
$ |
63,372 |
|
|
$ |
57,890 |
|
Accounts payable |
|
43,011 |
|
|
|
37,645 |
|
Accrued liabilities |
|
6,112 |
|
|
|
7,631 |
|
Current portion of long-term debt |
|
4,352 |
|
|
|
2,133 |
|
Current portion of operating lease liabilities |
|
6,430 |
|
|
|
6,758 |
|
Total current liabilities |
|
123,277 |
|
|
|
112,057 |
|
Long-term debt |
|
22,587 |
|
|
|
22,180 |
|
Long-term portion of operating lease liabilities |
|
59,881 |
|
|
|
62,989 |
|
Other long-term liabilities |
|
2,672 |
|
|
|
358 |
|
Total long-term liabilities |
|
85,140 |
|
|
|
85,527 |
|
Stockholders’ equity (deficiency): Class A common stock – no par value, unlimited shares authorized, issued and outstanding
11,447,999 (11,112,999 as of |
|
40,725 |
|
39,019 |
|||
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 |
|
21,825 |
|
|
|
23,504 |
|
Accumulated deficit |
|
(125,476 |
) |
|
|
(120,845 |
) |
Accumulated other comprehensive income (loss) |
|
22 |
|
|
|
(36 |
) |
Total stockholders’ equity (deficiency) |
|
(5,149 |
) |
|
|
(603 |
) |
Total liabilities and stockholders’ equity (deficiency) |
$ |
203,268 |
|
|
$ |
196,981 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240716697836/en/
Company Contact:
Vice President and Chief Financial Officer
(514) 397-2592
For all press and media inquiries, please contact:
Press@birks.com
Source: