Reitmans (Canada) Limited Reports Second Quarter Financial Results

MONTREAL, Sept. 17, 2026 /CNW/ -- Reitmans (Canada) Limited ("RCL" or the "Company") (TSXV: RET) (TSXV: RET-A), one of Canada's leading specialty apparel retailers, today reported its financial results for its second quarter of fiscal 2027. Unless otherwise indicated, all comparisons of results for the second quarter ended August 1, 2026, are to the second quarter ended August 2, 2025, and all comparisons of results for the year to date ended August 1, 2026, are to the year to date ended August 2, 2025. All dollar amounts are in Canadian currency.

Highlights

• Gross profit margin increased 160 basis points to 58.5%.
• Net revenues decreased 1.9% to $211.8 million and comparable sales¹ decreased 1.5%.
• Adjusted EBITDA¹ 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."

¹ This is a Non-GAAP Financial Measure. See "Non-GAAP Financial Measures & Supplementary Financial Measures" for reconciliations of these measures.

Selected Financial Information

(in millions of dollars, except for gross profit % and earnings per share) (unaudited)	Second quarter			Year to date fiscal
	2027	2026	Change	2027	2026	Change
Net revenues	$211.8	$215.9	(1.9 %)	$371.9	$374.7	(0.7 %)
Gross profit	$123.9	$122.8	0.9 %	$213.0	$211.2	0.9 %
Gross profit %	58.5 %	56.9 %	160 bps	57.3 %	56.4 %	90 bps
Selling, general and administrative expenses	$93.1	$88.6	5.1 %	$174.9	$173.6	0.7 %
Depreciation, amortization and net impairment losses	$15.4	$14.5	6.2 %	$30.4	$28.6	6.3 %
Strategic transformation expenses	$1.1	-	n/a	$1.4	-	n/a
Net earnings	$10.1	$13.1	(22.9 %)	$3.8	$3.1	22.6 %
Adjusted EBITDA	$18.8	$21.4	(12.1 %)	$13.5	$10.8	25.0 %
Earnings per share:
Basic	$0.20	$0.26	(23.1 %)	$0.08	$0.06	33.3 %
Diluted	$0.20	$0.26	(23.1 %)	$0.08	$0.06	33.3 %

On August 1, 2026, RCL had working capital¹ of $149.2 million, including cash of $152.7 million compared to working capital of $137.2 million, including cash of $151.0 million as at January 31, 2026, and working capital of $149.6 million, including cash of $125.3 million as at August 2, 2025. At the end of the second quarter of 2027, RCL had no significant long-term debt other than lease liabilities and no amounts were drawn under the Company's bank credit facilities.

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.

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.

The Company 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. 

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.

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.

The Company's complete financial statements including notes, and the Company's MD&A for the second quarter of fiscal 2027 are available online at www.sedarplus.ca.

Normal Course Issuer Bid ("NCIB")

During the year to date ended August 1, 2026, the Company purchased for cancellation 295,300 Class A non-voting Shares for an aggregate cash consideration of $0.6 million.

On July 30, 2026, the Company received approval from the TSX Venture Exchange to renew the NCIB. Under the renewed NCIB, the Company may acquire up to an aggregate of 3,000,000 Class A non-voting shares of the Company ("Shares") over the 12-month period commencing on August 5, 2026, and ending on August 4, 2027, representing approximately 10% of the public float of the Shares. Additionally, under the NCIB, the Company may not acquire more than 2% of the issued and outstanding Class A Shares at the time of purchase in any 30-day period.

Conference Call

The Company will host a conference call on September 18, 2026, at 8:30 am Eastern Time to discuss its second quarter financial results. Interested parties may join the conference call by dialing 1-888-699-1199 or 416-945-7677 approximately 15 minutes prior to the call to secure a line.

A live audio webcast of the call will be available at https://www.reitmanscanadalimited.com/pages/events-presentations and will be available for replay at this website for 12 months.

About Reitmans (Canada) Limited

Reitmans (Canada) Limited is one of Canada's leading specialty apparel retailers for women and men, with retail outlets throughout the country. The Company operates 385 stores under three distinct banners consisting of 216 Reitmans, 85 PENN., and 84 RW&CO.

For more information, visit www.reitmanscanadalimited.com.

For further information, please contact:

NON-GAAP Financial Measures & Supplementary Financial Measures

This press release makes reference to certain non-GAAP measures. These measures are not recognized measures under International Financial Reporting Standards ("IFRS") and do not have a standardized meaning prescribed by IFRS. They are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for the Company's analysis of its financial information reported under IFRS.

NON-GAAP Financial Measures

This press release discusses the following non-GAAP financial measures: adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), and working capital.  This press release indicates that Adjusted EBITDA as a percentage of net revenues is considered a non-GAAP financial ratio. The intent of presenting Adjusted EBITDA is to provide additional useful information to investors and analysts.

Adjusted EBITDA is currently defined as net (loss) earnings before depreciation, amortization, net impairment losses of non-financial assets, interest expense, interest income, income tax (recovery), and adjusted for the impact of certain items, such as strategic transformation expenses, pension windup-related costs, and a deduction of interest expense and depreciation relating to leases accounted for under IFRS 16, Leases. The Company began excluding strategic transformation expenses from Adjusted EBITDA in the third quarter of 2026.  Management believes that Adjusted EBITDA is an important indicator of the Company's ability to generate liquidity through operating cash flow to fund working capital needs and fund capital expenditures and uses this metric for this purpose. Management believes that Adjusted EBITDA as a percentage of net revenues indicates how much liquidity is generated for each dollar of net revenues. The exclusion of interest income and expenses, other than interest expense related to lease liabilities as explained hereafter, eliminates the impact on earnings derived from non-operational activities. The exclusion of depreciation, amortization and net impairment losses, other than depreciation related to right-of-use assets as explained hereafter, eliminates the non-cash impact and the exclusion of strategic transformation expenses and pension windup-related costs adjust the results to better reflect the on-going business. Strategic transformation expenses, which consist of employee benefits which include retention bonus, severance or termination benefits and other, and consulting fees, are adjusted as they represent specific expenses related to restructuring efforts to evolve the Company's operating structure as part of the implementation of the Company's five-year strategy plan. These expenses are limited to the project's timeframe and occur before any ongoing benefits are achieved. Adjusting such expenses can also be useful in assessing financial performance across periods on a comparable basis. Under IFRS 16, Leases, the characteristics of some leases result in lease payments being recognized in net earnings in the period in which the performance or use occurs while other leases are recorded as right-of-use assets with a corresponding lease liability recognized, which results in depreciation of those assets and interest expense from those liabilities. Management is presenting its Adjusted EBITDA to reflect the payments of its store and equipment lease obligations on a consistent basis. As such, the initial addback of depreciation of right-of-use assets and interest on lease obligations are removed from the calculation of Adjusted EBITDA, as this better reflects the operational cash flow impact of its leases.

Working capital is defined as current assets less current liabilities.  Management believes that working capital provides information that is helpful to understand the financial condition of the Company. Due to the seasonality of the Company's business, it is more relevant to compare the working capital position at the same point in time.

Reconciliation of NON-GAAP Measures

The tables below provide a reconciliation of net earnings to Adjusted EBITDA and the composition of working capital:

	Second quarter of		Year to date fiscal
	2027	2026	2027	2026
Net earnings	$              10.1	$              13.1	$              3.8	$              3.1
Depreciation, amortization and net impairment losses on property and equipment, and intangible assets	4.9	4.3	9.5	8.2
Depreciation on right-of-use assets	10.5	10.2	20.9	20.4
Interest expense on lease liabilities	2.5	2.5	5.0	5.0
Interest income	(1.0)	(1.0)	(1.9)	(2.0)
Income tax expense	3.7	5.0	0.7	1.2
Strategic transformation expenses	1.1	-	1.4	-
Pension windup-related costs	-	-	-	0.3
Rent impact from IFRS 16, Leases^1	(13.0)	(12.7)	(25.9)	(25.4)
Adjusted EBITDA	$              18.8	$              21.4	$              13.5	$              10.8
Adjusted EBITDA as % of net revenues	8.9 %	9.9 %	3.6 %	2.9 %

¹ Rent Impact from IFRS 16, Leases is comprised as follows:

	For the second quarter of		Year to date fiscal
	2027	2026	2027	2026
Depreciation on right-of-use assets	$              10.5	$              10.2	$              20.9	$              20.4
Interest expense on lease liabilities	2.5	2.5	5.0	5.0
Rent impact from IFRS 16, Leases	$              13.0	$              12.7	$              25.9	$              25.4

	As at August 1, 2026	As at August 2, 2025	As at January 31, 2026
Current assets	$              296.7	$              279.9	$ 280.2
Current liabilities	147.5	130.3	143.0
Working capital	$              149.2	$              149.6	$              137.2

Supplementary Financial Measures

The Company uses a key performance indicator ("KPI"), comparable sales, to assess store performance and sales growth. The Company engages in an omnichannel approach in connecting with its customers by appealing to their shopping habits through either online or store channels.  This approach allows customers to shop online for home delivery or to pick up in store, purchase in any of our store locations or ship to home from another store when the products are unavailable in a particular store.  Due to customer cross-channel behaviour, the Company reports a single comparable sales metric, inclusive of store and e-commerce channels. Comparable sales are defined as net sales generated by stores that have been continuously open during both of the periods being compared and include e-commerce net sales. The comparable sales metric compares the same calendar days for each period. Although this KPI is expressed as a ratio, it is a supplementary financial measure that does not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures used by other companies. Management uses comparable sales in evaluating the performance of stores and online net sales and considers it useful in helping to determine what portion of new net sales has come from sales growth and what portion can be attributed to the opening of new stores. Comparable sales is a measure widely used amongst retailers and is considered useful information for both investors and analysts. Comparable sales should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS.

Forward-Looking Statements

All of the statements contained herein, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond the Company's control and are based on several assumptions which give rise to the possibility that actual results could differ materially from the Company's expectations expressed in or implied by such forward-looking statements and that the objectives, plans, strategic priorities and business outlook may not be achieved.  Consequently, the Company cannot guarantee that any forward-looking statement will materialize, or if any of them do, what benefits the Company will derive from them. Forward-looking statements are provided in this press release for the purpose of allowing investors and others to get a better understanding of the Company's operating environment and management's expectations and plans as of the date of this press release. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose. Forward-looking statements are based upon the Company's current estimates, beliefs and assumptions, which are based on management's perception of historical trends, current conditions and currently expected future developments, as well as other factors it believes, are appropriate in the circumstances.

This press release contains forward-looking statements about the Company's objectives, plans, goals, expectations, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects, opportunities, and legal and regulatory matters. Specific forward-looking statements in this press release include, but are not limited to, statements with respect to the Company's belief in its strategies and its brands and their capacity to generate long-term profitable growth plans to meet certain financial objectives, future liquidity, planned capital expenditures, status and impact of systems implementation, the ability of the Company to successfully implement its strategic initiatives and cost reduction and productivity improvement initiatives as well as the impact of such initiatives.  These specific forward-looking statements are contained throughout this press release and the Company's Management Discussion & Analysis ("MD&A") including those listed in the "Risk and Uncertainties" section of the MD&A. Forward-looking statements are typically identified by words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "strive", "will", "may" and "should" and similar expressions, as they relate to the Company and its management.  Forward-looking statements are based on information currently available to management and on estimates and assumptions, including assumptions about future economic conditions and courses of action.  Examples of material estimates and assumptions and beliefs made by management in preparing such forward looking statements: management's belief in its strategies and its brands and their capacity to generate long-term profitable growth, significant sales growth in RW&CO both in stores and online, increased market share for both Reitmans and PENN., stability in the current market environment, changes in laws, rules, regulations and global standards, the Company's competitive position in its industry, the Company's ability to keep pace with changing consumer preferences, the absence of public health related restrictions impacting client shopping patterns or incremental direct costs related to health and safety measures, the Company's ability to execute on its capital expenditure plan, including at its distribution centre in Montreal, and the Company's ability to retain and recruit exceptional talent.

Numerous risks and uncertainties could cause the Company's actual results to differ materially from those expressed, implied or projected in the forward-looking statements. Please refer to the "Forward-Looking Statements" section of the Company's MD&A for the second quarter of fiscal 2027.

Risk and uncertainties not presently known to the Company or that the Company presently believes are not material could also cause actual results or events to differ materially from those expressed in its forward-looking statements. Additional risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time. See section entitled Risk and Uncertainties of the Company's MD&A for the second quarter of fiscal 2027.  The reader should not place undue reliance on any forward-looking statements included herein. These statements speak only as of the date made and the Company is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, except to the extent required under applicable securities law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Reitmans (Canada) Ltd