Reitmans Canada 3q09 result

(Source: Canada Newswire)MONTREAL, Dec. 8 /CNW Telbec/ - Sales for the nine months ended October 31, 2009 were virtually unchanged at $788,407,000 as compared with $789,060,000 for the nine months ended November 1, 2008. In a challenging retail environment, same store sales decreased 1.8%. Operating earnings before depreciation and amortization (EBITDA(1)) for the period decreased 19.9% to $121,171,000 as compared with $151,192,000 last year. Net earnings and diluted earnings per share decreased to $53,148,000 or $0.77 per share as compared to $76,825,000 or $1.08 per share for the same period last year. The Company had 981 stores in operation at the end of this period compared to 978 stores at the same time last year.

=> I think mainly due to fall in US dollars

Sales for the third quarter ended October 31, 2009 decreased 0.2% to $270,684,000, as compared with $271,240,000 for the third quarter ended November 1, 2008. Same store sales for the comparable 13 weeks decreased 2.2%. EBITDA for the period decreased 12.1% to $42,098,000 as compared with $47,873,000 last year. Net earnings and diluted earnings per share decreased to $18,921,000 or $0.28 per share as compared to $23,004,000 or $0.32 per share for the same period last year.

=> I think mainly due to fall in US dollars, result looks reasonable but not impressive. As stock price rise to $16-17.0 level, my recommenation is HOLD instead of BUY.

Sales for the month of November (four weeks ended November 28, 2009), as a result of the continuing difficult retail environment, decreased 2.6% with same store sales decreasing 4.0%.
During the third quarter, the Company opened 12 new stores comprised of 3 Reitmans, 3 Smart Set, 3 RW & CO., 1 Cassis, 1 Penningtons and 1 Addition Elle; 2 stores were closed. Accordingly, at October 31, 2009, there were 981 stores in operation, consisting of 370 Reitmans, 167 Smart Set, 65 RW & CO., 76 Thyme Maternity, 17 Cassis, 163 Penningtons and 123 Addition Elle. An additional 3 stores are scheduled to open this year and 9 stores will be closed.

At the Board of Directors meeting held on December 8, 2009, a quarterly cash dividend (constituting eligible dividends) of $0.18 per share on all outstanding Class A non-voting and Common shares of the Company was declared, payable January 28, 2010 to shareholders of record on January 8, 2010.

As reported in the November 25, 2009 press release, the Company received approval from the Toronto Stock Exchange to proceed with a normal course issuer bid, under which the Corporation may purchase up to 2,728,972 Class A non-voting shares, representing 5% of the issued and outstanding Class A non-voting shares as at November 23, 2009. The bid commenced on November 28, 2009 and may continue to November 27, 2010.