Roots Corporation, a premium outdoor-lifestyle brand, announced Friday its Fiscal 2026 first quarter results with sales of $42.6 million, a 6.5% increase as compared to $40.0 million in Q1 2025.
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“Roots delivered first quarter sales growth of 6.5 percent and comparable sales growth of 3.2 percent, or 16.6 percent on a two-year stacked basis, alongside a 20.7 percent reduction in net debt year-over-year. Within the first quarter, we continued to diversify our product offering with both our lifestyle and activewear offerings increasing as a percentage of sales,” said Meghan Roach, President & Chief Executive Officer.
“These results reflect the continued strength of the business as we advance two significant initiatives this year: the transition of our distribution centre to Metro Supply Chain, and the review of strategic alternatives being led by our Board. The costs associated with these initiatives are reflected in our results. We remain focused on disciplined execution and building long-term value for all our shareholders.”
In January 2026, the company announced its strategic distribution partnership with Metro Supply Chain. The transition is anticipated to be completed by the end of the second quarter. In Q1 2026, the company incurred $1.8 million incremental costs related to this transition, which is primarily driven by the accelerated non-cash depreciation of existing fixed assets. To minimize the cash impacts of the upcoming transition, Roots has shifted additional products to final sale to reduce the transfer of past-season inventory, said Roots.
“As announced in March 2026, the company and its Board of Directors continue to conduct its review of strategic alternatives, which may include, but not limited to, a sale of the company. In Q1 2026, the xompany incurred $0.6 million in incremental consulting and legal costs related to this process,” it added.
Q1 financial highlights:
- Sales were $42.6 million, a 6.5% increase as compared to $40.0 million in Q1 2025
- DTC sales were $35.8 million, a 3.3% increase as compared to $34.6 million in Q1 2025
- DTC comparable sales growth was 3.2%
- Gross margin was 59.9%, as compared to 61.5% in Q1 2025
- DTC gross margin of 61.3%, as compared to 62.9% in Q1 2025
- Adjusted EBITDA amounted to ($7.4) million, as compared to ($7.1) million in Q1 2025
- Net loss totaled ($10.1) million, as compared to ($7.9) million in Q1 2025
- Adjusted Net Income (Loss), which excludes the impacts of the distribution centre transition and strategic review, along with other non-recurring or unusual costs outside the normal course of operations, was ($7.6) million, as compared to ($7.4) million last year.
- Net debt reduced 20.7% year-over-year to $23.4 million
“We are pleased with the continued sales momentum and deleveraging in the first quarter, and we continue to progress on our strategic review and the distribution centre transition initiatives,” said Leon Wu, Chief Financial Officer. “We are in the final stages of preparation for our distribution centre move and remain on track to be fully operational at the third-party distribution centre by the end of the second quarter.”
Roots, established in 1973, is a global lifestyle brand. As at the end of Q1 2026, the retailer operated 96 corporate retail stores and 11 short-term pop-up locations in Canada, two stores in the United States, and an eCommerce platform, roots.com. It has more than 100 partner-operated stores in Asia, and it also operates a dedicated Roots-branded storefront on Tmall.com in China.
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