Reitmans (Canada) Limited, one of Canada’s leading specialty apparel retailers, reported on Thursday its financial results for its second quarter of fiscal 2027, indicating net revenues decreased 1.9% to $211.8 million primarily due to lower transaction volume and reduced clearance activity compared to the prior year.
Reitmans, a specialty apparel retailer for women and men operates 385 stores under three distinct banners consisting of 216 Reitmans, 85 PENN., and 84 RW&CO.
Highlights
- Gross profit margin increased 160 basis points to 58.5%.
- Net revenues decreased 1.9% to $211.8 million and comparable sales decreased 1.5%.
- Adjusted EBITDA was $18.8 million, $2.6 million below last year.
- Net earnings were $10.1 million, or $0.20 per share.
“Our second quarter reflected deliberate, strategic execution across our brands,” said Andrea Limbardi, President and CEO of RCL. “While net revenues were modestly below last year, we meaningfully improved gross margin through stronger regular-price selling, a more disciplined promotional strategy and tighter inventory management. Inventory ended the quarter approximately 5.2% below last year, supporting improved merchandise margins and positioning us well for the balance of the year.
“Performance varied by channel during the quarter. Our comparable store sales increased and we saw continued strong momentum in our new flagship locations. The recently converted Reitmans concept flagship at Carrefour Laval and the expanded and renovated RW&CO Toronto Eaton Centre flagship both delivered double-digit sales growth. E-commerce revenues were lower than last year as we reduced clearance and promotional activity.
“The improvement in gross profit was offset by higher operating expenses, including freight costs, rent, store wages and advertising investments, as well as early work to develop a loyalty program. During the quarter, Reitmans marked its 100th anniversary through our ‘We’ve Evolved’ campaign and partnership with the WNBA’s Toronto Tempo, initiatives that strengthened the brand’s fashion and cultural relevance and generated encouraging shifts in brand perception.
“With a strong balance sheet and clear strategic priorities, we remain focused on disciplined execution, strengthening the customer experience across channels and advancing the initiatives that support sustainable, profitable growth over the long term.”
Second Quarter Overview
Net revenues decreased 1.9% to $211.8 million primarily due to lower transaction volume and reduced clearance activity compared to the prior year. Comparable sales, which include e-commerce net revenues, decreased 1.5%. Retail store performance remained resilient during the quarter, while e-commerce revenues were impacted by a more selective promotional approach, said the company.
Gross profit increased $1.1 million to $123.9 million, while gross margin improved 160 basis points to 58.5% of net revenues. The increase in gross profit and gross margin was primarily attributable to lower markdowns and promotional activity compared to the same quarter a year earlier, it added.
Reitmans said it ended the quarter with inventory of $119.7 million, approximately 5.2% below the prior year, reflecting disciplined inventory management and supporting improved merchandise margins and regular-price selling.
Strategic transformation expenses of $1.1 million related to employee termination benefits and consulting fees associated with restructuring efforts to evolve the Company’s operating structure, it noted.
“Adjusted EBITDA was $18.8 million as compared to $21.4 million for the second quarter of 2026. The decrease of $2.6 million is primarily attributable to higher SG&A expenses that more than offset the increase in gross profit for the quarter,” explained the retailer.
“Net earnings were $10.1 million ($0.20 basic and diluted earnings per share) as compared with net earnings of $13.1 million ($0.26 basic and diluted earnings per share) a year earlier.”
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