Indigo Books & Music Inc. Receives Boost Due to Holiday Sales in Q3
Indigo Books & Music Inc. (TSX:IDG) stock was up 8.4% in early afternoon trading on February 7. The Toronto-based company sells books, gifts, and toys at its various retail outlets. Shares have now climbed 10% year over year.
Indigo released its third-quarter results on February 6. The retailer typically sees its highest activity during the holiday season a as a retailer of books, gift and holiday cards, and other holiday-focused trinkets. Revenue in the third quarter climbed 8.2% from Q3 2016 to $433.3 million. Total comparable sales rose 7.9% with both online operations and in-store performance boosting numbers.
Book stores also saw a hike in activity from the best-seller Fire and Fury, a detailed account of the first months of the Trump White House. Sales of the book exceeded 1.7 million in the third week of its release. Non-fiction books typically fare much worse than fiction. For example, Harry Potters and the Deathly Hallows sold more than 8 million copies in its first 24 hours.
Indigo plans to open several new locations in 2018, including a flagship store in downtown Vancouver and a distribution facility in Calgary. Net earnings in the third quarter reached $42.6 million or $1.58 per common share compared to $40 million or $0.50 per share in the prior year.
The opening months of 2018 are typically slower for retailers, but Indigo should see a spike in February as the retailer pulls in consumers for Valentine’s Day. Still, investors should think about taking profits as we look ahead to the spring.