Mr. Stephen Reitman reports

REITMANS (CANADA) LIMITED ("RCL") ANNOUNCES ITS RESULTS FOR THE 13 WEEKS ENDED APRIL 29, 2023

Reitmans (Canada) Ltd. has released its results for the first quarter of fiscal 2024. Unless otherwise indicated, all comparisons of results for the 13 weeks ended April 29, 2023, are with the results for the 13 weeks ended April 30, 2022.

First quarter highlights:

• Net sales increased by $11.1-million or 7.2 per cent to $165.0-million.
• Gross margin increased by $4.1-million from $84.0-million to $88.1-million.
• Adjusted ROA (results from operating activities) decreased by $2.6-million.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) decreased by $4.3-million.
• Subsequent to the quarter-end, Andrea Limbardi appointed as president and chief executive officer effective September, 2023.

"I am very pleased with the start to fiscal 2024, against a background of higher interest rates and inflation impacting customers' shopping behaviours, and the foreign exchange impact on RCL's U.S.-dollar-denominated purchases," said Stephen F. Reitman, president and chief executive officer of Reitmans. "With supply chain conditions considerably improved in comparison to the first quarter of 2023, we benefited from lower supply chain costs in the first quarter of 2024. We believe our ability to provide customers fashion merchandise at affordable prices through shopping in our stores or on-line, where orders are fulfilled from our network of stores or from our distribution centre, is an important contributor to our success.

"We would also like to welcome Andrea Limbardi, who will become the president and CEO of RCL," Mr. Reitman added. "We are confident that Andrea's deep experience in the retail industry and expertise at applying digital strategies will positively contribute in delivering on our long-term growth aspirations."

13 weeks ended April 29, 2023

Net sales for the first quarter of 2024 increased by $11.1-million or 7.2 per cent to $165.0-million. The increase was primarily due to the growth in comparable sales, mainly driven by increased in-store traffic and improved sales dollars per unit. Comparable sales, including e-commerce net sales, increased 6.4 per cent during the first quarter of 2024.

Gross profit for the first quarter of 2024 increased by $4.1-million to $88.1-million, as compared with $84.0-million for the first quarter of 2023. The increase in gross profit is primarily attributable to the increase in net sales during the first quarter of 2024. Gross profit as a percentage of net sales for the first quarter of 2024 decreased to 53.4 per cent from 54.6 per cent for the first quarter of 2023, primarily attributable to higher promotional activity combined with an unfavourable foreign exchange impact on U.S.-dollar-denominated purchases included in cost of goods sold, partially offset by lower supply chain costs.

Net loss for the first quarter of 2024 was $3.8-million (basic and diluted loss of eight cents per share), as compared with a net loss of $1.7-million (basic and diluted loss of four cents per share) for the first quarter of 2023. The increase in the net loss of $2.1-million is primarily attributable to an increase in store and corporate personnel costs, higher rent as a result of previous preferential lease arrangements being renewed at closer to market lease rates, partially offset by an increase in gross profits and an increase in the income tax recovery.

Adjusted results from operating activities for the first quarter of 2024 was negative $3.6-million, as compared with negative $1.0-million for the first quarter of 2023. The decrease of $2.6-million in adjusted ROA is primarily attributable to an increase in operating costs, partially offset by the increase in gross profit.

Adjusted EBITDA for the first quarter of 2024 was negative $1.2-million, as compared with $3.1-million for the first quarter of 2023. The decrease of $4.3-million is primarily attributable to an increase in operating costs, partially offset by the increase in gross profits.

About Reitmans (Canada) Ltd.

The company is a leading women's specialty apparel retailer with retail outlets throughout Canada. As at April 29, 2023, the company operated 406 stores consisting of 235 Reitmans, 91 Penningtons and 80 RW&CO.

Reconciliation of non-IFRS (international financial reporting standards) measures

The attached tables provide a reconciliation of net loss to adjusted EBITDA and results from operating activities to adjusted ROA.

Supplementary financial measures

The company uses a key performance indicator (KPI), comparable sales, to assess store performance and sales growth. The company engages in an omnichannel approach in connecting with its customers by appealing to their shopping habits through either on-line or store channels. This approach allows customers to shop on-line for home delivery or to pick up in store, purchase in any of the store locations or ship to home from another store when the products are unavailable in a particular store. Due to customer cross-channel behaviour, the company reports a single comparable sales metric, inclusive of store and e-commerce channels. Comparable sales are defined as net sales generated by stores that have been continuously open during both of the periods being compared and include e-commerce net sales. The comparable sales metric compares the same calendar days for each period. Although this KPI is expressed as a ratio, it is a supplementary financial measure that does not have a standardized meaning prescribed by IFRS and may not be comparable with similar measures used by other companies. Management uses comparable sales in evaluating the performance of stores and on-line net sales and considers it useful in helping to determine what portion of new net sales has come from sales growth and what portion can be attributed to the opening of new stores. Comparable sales is a measure widely used amongst retailers and is considered useful information for both investors and analysts. Comparable sales should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS.

We seek Safe Harbor.