Roots, a Canada-based premium outdoor-lifestyle brand, has reported total sales of $90.9 million for the first half of fiscal 2023 (H1 FY23), representing flat sales compared to the same period in FY22. Direct-to-consumer (DTC) sales were down by 4.4 per cent, amounting to $72.5 million, while partners and other sales rose sharply by 22.3 per cent to reach $18.4 million.

The gross profit was reported at $51.9 million, representing 57.1 per cent of sales, which is a decline from the 60 per cent margin seen in FY22. The company faced a net loss of $13.3 million, equating to a loss of $0.32 per share, a deeper plunge compared to a loss of $8.5 million or $0.20 per share last year. The adjusted EBITDA stood at a loss of $8.8 million, more than double the loss seen in the same period last year, which was $3.8 million, Roots said in a press release.

In the second quarter (Q2) of FY23, total sales exhibited a growth of 3.4 per cent to stand at $49.4 million, up from $47.8 million in 2022. DTC sales underwent a decline of 3.5 per cent year-over-year to settle at $37.1 million. Despite the decrease in DTC, Roots enjoyed a robust increase in sales of their Active collection in the emerging apparel segment, boasting a 50 per cent year-over-year growth.

Partners and other sales experienced a significant boost in Q2 FY23, increasing by 31.7 per cent to $12.3 million. This spike was attributed mainly to higher sales to the firm's international operating partner in Taiwan, including the early delivery of orders worth $2.6 million.

The gross profit, however, saw a reduction of 3.2 per cent year-over-year in Q2 FY23, recording $27.4 million at a margin of 55.5 per cent, compared to the 59.3 per cent margin reported in Q2 FY22. The selling, general, and administrative expenses experienced an uptick, amounting to $32.3 million as compared to $30.6 million in the same quarter last year.

The net income reported a loss of $5.3 million in Q2 FY23, translating to a loss of $0.13 per share, which is greater than the loss of $3.2 million or $0.08 per share faced in Q2 FY22. The adjusted EBITDA recorded a loss of $3 million, considerably more than the $0.6 million loss in Q2 FY22.

At the end of Q2 FY23, the inventory showed a marginal increment, standing at $55.9 million, a 2 per cent increase from $54.8 million reported at the end of Q2 FY22.

"We are pleased with how our teams have performed and happy with the performance of our major new product launches despite the tough economic conditions. Our Beaver Canoe, Active, and One collections showed strong growth within the quarter," said Meghan Roach, president and CEO of Roots Corporation.

Fibre2Fashion News Desk (DP)

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