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Reitmans (Canada) has higher Q3 profit
04
Dec '10
Reitmans (Canada) Limited announces its results for the nine months ended October 30, 2010. Sales for the nine months ended October 30, 2010 increased 1.6% to $800,793,000 as compared with $788,407,000 for the nine months ended October 31, 2009. Same store sales were flat.

Operating earnings before depreciation and amortization for the period increased 24.6% to $151,022,000 as compared with $121,171,000 last year. The Company's gross margin increased from 64.0% to 68.1% in the first nine months of fiscal 2011, primarily due to the strengthening of the Canadian dollar vis-à-vis the US dollar. Net earnings increased 42.3% to $75,620,000 or $1.12 diluted earnings per share, as compared with $53,148,000 or $0.77 diluted earnings per share last year.

Sales for the third quarter ended October 30, 2010 decreased 1.7% to $266,162,000, as compared with $270,684,000 for the third quarter ended October 31, 2009. Same store sales for the comparable 13 weeks decreased 3.1%. Operating earnings before depreciation and amortization for the period decreased 0.3% to $41,966,000 as compared with $42,098,000 last year.

The Company's gross margin increased from 65.2% to 66.7% in the third quarter ended October 30, 2010, primarily due to the strengthening of the Canadian dollar vis-à-vis the US dollar. Net earnings increased 1.9% to $19,274,000 or $0.29 diluted earnings per share as compared to $18,921,000 or $0.28 diluted earnings per share for the same period last year.

Sales for the month of November (four weeks ended November 27, 2010) were flat compared to November 2009 with same store sales decreasing 1.0%.

During the third quarter, the Company opened 9 new stores comprised of 2 Reitmans, 1 Smart Set, 1 RW & CO., 1 Cassis, 1 Penningtons and 3 Addition Elle; 7 stores were closed. At October 30, 2010, there were 979 stores in operation, consisting of 364 Reitmans, 161 Smart Set, 68 RW & CO., 76 Thyme Maternity, 22 Cassis, 165 Penningtons and 123 Addition Elle, as compared with a total of 981 stores as at October 31, 2009. An additional 4 stores are scheduled to open this year and 14 stores will be closed.

At the Board of Directors meeting held on December 1, 2010, a quarterly cash dividend (constituting eligible dividends) of $0.20 per share on all outstanding Class A non-voting and common shares of the Company was declared, payable January 27, 2011 to shareholders of record on January 7, 2011.

Financial statements are attached. For management's commentary on the third quarter and nine months results, please refer to the attached Management's Discussion and Analysis of Financial Condition and Results of Operations for the periods ended October 30, 2010.

As reported in the November 22, 2010 press release, the Company received approval from the Toronto Stock Exchange to proceed with a normal course issuer bid, under which the Company may purchase up to 2,638,115 Class A non-voting shares, representing 5% of the issued and outstanding Class A non-voting shares as at November 17, 2010. The bid commenced on November 28, 2010 and may continue to November 27, 2011.

Reitmans is a Canadian ladies' wear specialty apparel retailer. The Company has seven banners: Reitmans, Smart Set, RW & CO., Thyme Maternity, Cassis, Penningtons and Addition Elle. Each banner is focused on a particular niche in the retail marketplace. Each banner has a distinct marketing program as well as a specific website thereby allowing the Company to continue to enhance its brands and strengthen customer loyalty.

Reitmans (Canada) Limited

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