Ms. Andrea Limbardi reports

REITMANS (CANADA) LIMITED ANNOUNCES ITS RESULTS FOR THE 13 AND 39 WEEKS ENDED OCTOBER 28, 2023

Reitmans (Canada) Ltd. has released its results for the third quarter of fiscal 2024. Unless otherwise indicated, all comparisons of results for the 13 weeks ended Oct. 28, 2023, are with results for the 13 weeks ended Oct. 29, 2022, and all comparisons of results for the 39 weeks ended Oct. 28, 2023, are with results for the 39 weeks ended Oct. 29, 2022.

The company continued to perform well in the third quarter of 2024 although below the results of the third quarter of 2023, which benefited from the company's exceptional performance aided by improved market conditions with pent-up demand following the easing of pandemic-related restrictions. The current economic environment necessitated higher promotional activity as Canadian consumers cautiously managed their discretionary spending budgets. Results continued to be negatively impacted by unfavourable foreign exchange on U.S.-dollar-denominated merchandise purchases.

"Our fall styles resonated well with our customers in all three brands despite the fact that the economic headwinds and warmer-than-usual weather impacted our traffic. We also are pleased with strong results in two key strategic categories of men's fashion at RW&CO. and Hyba activewear at Reitmans," said Andrea Limbardi, president and chief executive officer of Reitmans. "Our strong balance sheet and focus on our long-term strategic road map to deliver modernization in digital technology and in our distribution centre continue to progress positively. In the third quarter, we launched a new robotics system in our distribution centre, significantly speeding up processing times. As well, we are on schedule to roll out a nationwide point-of-sale system in our 400-plus stores across Canada in 2024. RCL is well positioned, with our strong customer loyalty and financial standing, to deliver long-term value to our shareholders."

Third quarter of 2024:

• Net revenues were $193.4-million compared with $206.2-million for the third quarter of 2023.
• Net earnings were $5.3-million compared with $14.6-million for the third quarter of 2023.

Year-to-date fiscal 2024:

• Net revenues were $573.7-million compared with $590.4-million for the year-to-date fiscal 2023.
• Net earnings were $14.8-million compared with $50.2-million for the year-to-date fiscal 2023.

13 weeks ended Oct. 28, 2023

Net revenues for the third quarter of 2024 decreased by $12.8-million, or 6.2 per cent, to $193.4-million. Comparable sales, which include e-commerce net sales, decreased 7.7 per cent during the third quarter of 2024. The decrease in net revenues and comparable sales was primarily due to lower store and e-commerce traffic, lower average transaction values, and higher promotional activity. It believes that comparatively higher interest rates and inflation over all compared with the corresponding period last year negatively impacted consumer spending during the third quarter of 2024.

Gross profit for the third quarter of 2024 decreased $10.5-million to $107.6-million as compared with $118.1-million for the third quarter of 2023. Gross profit as a percentage of net revenues for the third quarter of 2024 decreased to 55.6 per cent from 57.3 per cent for the third quarter of 2023. The decrease in gross profit and as a percentage of net revenues is primarily attributable to higher markdown and promotional activity combined with an unfavourable foreign exchange impact of approximately $3.2-million on U.S.-dollar-denominated purchases included in cost of goods sold, partially offset by lower supply chain costs in the third quarter of 2024, as global shipping industry disruptions were prevalent in the third quarter of 2023.

Net earnings for the third quarter of 2024 were $5.3-million (11-cent basic and diluted earnings per share) as compared with net earnings of $14.6-million (30-cent basic and diluted earnings per share) for the third quarter of 2023. The decrease in net earnings of $9.3-million is primarily attributable the decrease in gross profit and an increase in income tax expense, partially offset by a decrease in overall operating costs.

Adjusted results from operating activities for the third quarter of 2024 were $7.1-million as compared with $15.2-million for the third quarter of 2023. The decrease of $8.1-million is primarily attributable to a decrease in gross profit, partially offset by a decrease in overall operating costs.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the third quarter of 2024 was $9.5-million as compared with $18.0-million for the third quarter of 2023. The decrease of $8.5-million is primarily attributable to a decrease in gross profit, partially offset by a decrease in overall operating costs.

39 weeks ended Oct. 28, 2023

Net revenues for the year-to-date fiscal 2024 decreased by $16.7-million, or 2.8 per cent, to $573.7-million. Comparable sales, which include e-commerce net sales, decreased 3.7 per cent during the year-to-date fiscal 2024. The decrease in net revenues and comparable sales was primarily due to lower average transaction values and higher promotional activity. It believes that comparatively higher interest rates and inflation over all compared with the corresponding period last year negatively impacted consumer spending during the year-to-date fiscal 2024.

Gross profit for the year to date fiscal 2024 decreased $25.7-million to $316.1-million as compared with $341.8-million for the year-to-date fiscal 2023. Gross profit as a percentage of net revenues for the year-to-date fiscal 2024 decreased to 55.1 per cent from 57.9 per cent for the year-to-date fiscal 2023. The decrease both in gross profit and as a percentage of net revenues is primarily attributable to higher markdowns and promotional activity in the year-to-date fiscal 2024 combined with an unfavourable foreign exchange impact of approximately $11.4-million on U.S.-dollar-denominated purchases included in cost of goods sold, partially offset by lower supply chain costs in the year-to-date fiscal 2024 as global shipping industry disruptions were prevalent in the year-to-date fiscal 2023.

Net earnings for the year to date fiscal 2024 were $14.8-million (30-cent basic and diluted earnings per share) as compared with $50.2-million ($1.03 basic and diluted earnings per share) for the year-to-date fiscal 2023. The decrease in net earnings of $35.4-million is primarily attributable to the decrease in gross profit, the increase in operating costs and the increase in income tax expense.

Adjusted return on assets for the year-to-date fiscal 2024 was $21.5-million as compared with $51.9-million for the year-to-date fiscal 2023. The decrease of $30.4-million is primarily attributable to the decrease in gross profit and the increase in operating costs.

Adjusted EBITDA for the year-to-date fiscal 2024 was $27.5-million as compared with $60.7-million for the year-to-date fiscal 2023. The decrease of $33.2-million is primarily attributable to the decrease in gross profit and the increase in operating costs.

About Reitmans (Canada) Ltd.

The company is a leading women's specialty apparel retailer with retail outlets throughout Canada. As at Oct. 28, 2023, the company operated 401 stores consisting of 231 Reitmans, 90 Penningtons and 80 RW&CO.

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