Reitman’s (TSX:RET) is a Toronto-based apparel retailer. Like many clothing retailers with a large brick-and-mortar footprint, Reitman’s has fallen victim to the unfolding "retail apocalypse", which has claimed big names over the past decade. The company is moving to adapt to big changes in the retail sector, but it is facing major challenges going forward.
Reitman’s released its fourth quarter and full-year fiscal 2019 results on April 3. The company posted an operating loss of $1.9 million compared to a $6.3-million loss in the prior year.
This was primarily due to a reduction in operating costs. Reitman’s still suffered from a 13% drop in gross profit to $17.8 million. However, the extra week in the fourth quarter of 2018 contributed to this retreat.
For the full-year adjusted EBITDA climbed to $57.7 million compared to $43.7 million for fiscal 2018. This was primarily due to a reduction in selling, distribution, and administrative costs. Cash flow from operating activities rose to $42 million compared to $31 million in the previous fiscal year.
There are some positives to glean as Reitman’s prepares to release its first-quarter results for fiscal 2020 in early June. In April the board of directors declared a quarterly cash dividend of $0.05 per share.
This represents an attractive 6.4% yield. It’s forward P/E of 28 is solid relative to industry but is high for value investors especially considering the turbulence in retail. Reitman’s is worth a buy at a discount for income investors ahead of its next earnings report.
