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Reitmans profits fall in first quarter
Jun '11
Reitmans (Canada) Limited announces its results for the three months ended April 30, 2011.

Sales for the first quarter ended April 30, 2011 decreased 7.0% to $219,296,000 as compared with $235,745,000 for the first quarter ended May 1, 2010. Same store sales decreased 8.7%. The first quarter ended April 30, 2011 yielded disappointing sales results primarily due to poor weather which resulted in a difficult retail environment marked by increased promotional activity.

Other factors that contributed to the sales decline included the impact of higher gasoline prices reducing consumer disposable income for apparel purchases and a late Easter holiday that traditionally initiates increased sales of spring and summer merchandise. The Company's gross margin decreased from 67.8% to 65.8% for the quarter ended April 30, 2011.

An improvement in the gross margin attributable to the strength of the Canadian dollar in the quarter ended April 30, 2011 was offset by a reduction due to increased promotional activity. Earnings before interest, taxes, depreciation and amortization and investment income ("EBITDA") decreased 47.7% to $19,503,000 as compared with $37,278,000 last year. Net earnings decreased 96.0% to $624,000 or $0.01 diluted earnings per share as compared with $15,770,000 or $0.23 diluted earnings per share last year.

During the quarter, the Company opened 8 new stores comprised of 2 Reitmans, 2 Smart Set, 1 Thyme Maternity, 1 Cassis and 2 Addition Elle. Eleven stores were closed comprised of 3 Reitmans, 3 Smart Set, 3 Thyme Maternity, 1 Penningtons and 1 Addition Elle. Accordingly, at April 30, 2011, there were 965 stores in operation, consisting of 363 Reitmans, 157 Smart Set, 67 RW & CO., 73 Thyme Maternity, 23 Cassis, 160 Penningtons and 122 Addition Elle, as compared with a total of 982 stores as at May 1, 2010.

Sales for the month of May (the four weeks ended May 28, 2011) decreased 8% with same store sales decreasing 8% due to the continuing unseasonable weather conditions.

At the Board of Directors meeting held on May 31, 2011, 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 July 28, 2011 to shareholders of record on July 14, 2011.

Effective for the first quarter ended April 30, 2011, Reitmans began reporting its financial results in accordance with International Financial Reporting Standards ("IFRS"), including comparative information. Previously reported financial results prepared in accordance with Canadian generally accepted accounting principles have been presented to conform to the new standards adopted.

Reitmans (Canada) Limited is one of the largest publicly-owned retail companies in Canada, it still operates with a strong family culture.

Reitmans (Canada) Limited

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