Canadian outdoor-lifestyle brand Roots recorded total sales of C$40m ($29.3m) in the first quarter (Q1) of 2025, a rise of 6.7% from the previous year’s C$37.5m.
The company’s direct-to-consumer (DTC) sales edged up to C$34.6m in Q1 2025, a 10.2% climb from C$31.4m in Q1 2024.
Go deeper with GlobalData
The DTC segment’s momentum was evident with a 14.1% surge in comparable sales growth, attributed to improved product curation and customer experience, with better stock availability.
Although partner and other sales, including wholesale activities, licensing and custom products, saw a dip to C$5.4m from C$6.1m in Q1 2024, this was partially mitigated by growth in other business lines, such as China Tmall e-commerce sales.
The company’s gross profit for Q1 2025 stood at C$24.6m, an 11.2% increase year-on-year (YoY). Gross margin improved to 61.5% compared to 59% in Q1 2024.
Roots CEO and president Meghan Roach stated: “Our first-quarter results, marking the third consecutive quarter of year-over-year growth in sales, gross margin, and adjusted EBITDA [earnings before interest, taxation, depreciation and amortisation], speaks to the growing resonance of the Roots brand and the discipline with which we are executing our strategic priorities.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataSelling, general and administrative expenses rose by 4.1% to C$33.3m, with a portion of this increase due to a C$0.5m of unfavourable revaluation of cash-settled instruments under the company’s share-based compensation plan.
The company narrowed its net loss to C$7.9m in Q1 2025 from C$8.9m in the same period of 2025. Inventory levels increased 14.5% to C$40.5m, driven by a strategic increase in core collections and higher in-transit inventory to support the upcoming season.
Roots has a free cash flow of C$21.8m, primarily due to increased inventory purchases and the timing of occupancy cost payments.
As of 3 May 2025, the company reported a net debt of C$29.6m, an improvement from C$31.7m a year earlier, with a leverage ratio of 1.3x.
Roots amended its credit agreement on 22 May, extending the maturity date and adjusting its credit facilities, which will impact future debt financing costs.
Roach added: “From elevated marketing to improved product availability and AI-operational enhancements, we drove meaningful gains across key performance metrics. As we begin 2025, I am proud of how our team continues to innovate and deliver value, while navigating consumer preferences and the evolving retail landscape.”
Roots posted total sales of C$262.92m in the fiscal year 2024.
