Canada-based global lifestyle brand Roots has reported a net loss of C$8.89m ($6.46m) for the first quarter (Q1) of the fiscal year 2024 (FY24), marking an 11.7% increase from a net loss of C$7.96m in the same quarter of FY23. 

The company’s net loss per share for the quarter was C$0.22, a 15.8% decrease from a net loss of C$0.19 per share reported in Q1 2023. 

During the quarter ending 4 May 2024, total sales stood at C$37.46m ($27.21m), a 9.7% decrease from C$41.49m in the corresponding quarter of the previous year.  

The company’s direct-to-customer (DTC) sales, which include corporate retail store and e-commerce sales, declined by 11.3% year-on-year (YoY) to C$31.40m from C$35.40m. 

The drop in DTC sales was attributed to fewer markdown sales due to an improved inventory position compared with the previous year.  

Roots’ selling, general and administrative expenses decreased by 3.1% to C$31.98m in Q1 2024 from C$33m in Q1 2023, reflecting the impact of ongoing cost management initiatives and lower variable selling costs, partially offset by increased store personnel costs due to legislative minimum wage increases in 2023. 

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The company’s gross profit for the quarter was C$22.10m, a 9.7% decrease from C$24.48m in Q1 2023, with the gross margin remaining steady at 59% for both quarters.  

Roots also saw its net debt reduced by 22.7% YoY, standing at C$31.7m as of 4 May 2024 compared with C$41.0m a year previously. 

Roots president and CEO Meghan Roach said: “We made significant progress on our strategic initiatives this quarter, marked by robust direct-to-consumer margin growth, reduced debt, and enhanced liquidity and free cash flow on a year-over-year basis.  

“We also recently launched our brand ambassador programme and debuted our AI-driven replenishment system, which will positively enhance our operations, customer experience and engagement. 

“Our disciplined approach to inventory management resulted in fewer markdown sales, which created short-term downward pressure on revenue in the first quarter. However, we continued to see positive momentum in many product lines, including solid growth in our adult activewear collection.”