TCF POST Report

MONTREAL, Sept. 17, 2026 — Canadian specialty apparel retailer Reitmans (Canada) Limited reported a softer second quarter in fiscal 2027, with revenue and earnings declining year on year, while stronger regular-price selling, lower markdowns and tighter inventory management lifted gross margin.

For the quarter ended August 1, 2026, net revenue fell 1.9% to C$211.8 million, while comparable sales declined 1.5%. Gross profit, however, increased 0.9% to C$123.9 million, pushing gross margin up 160 basis points to 58.5%, from 56.9% a year earlier.

Adjusted EBITDA declined 12.1% to C$18.8 million, compared with C$21.4 million in the prior-year quarter. Net earnings fell 22.9% to C$10.1 million, or C$0.20 per diluted share, from C$13.1 million, or C$0.26 per share.

The company attributed the revenue decline primarily to lower transaction volumes and reduced clearance activity. Its more selective promotional strategy also weighed on e-commerce revenue, although retail-store performance remained resilient.

Margin Gains Offset by Higher Costs

Reitmans said the improvement in gross profit was driven mainly by lower markdowns and promotional activity. Inventory stood at C$119.7 million at quarter-end, 5.2% below the prior year, supporting higher merchandise margins and greater regular-price selling.

The margin improvement was offset by higher operating costs. Selling, general and administrative expenses increased 5.1% to C$93.1 million, while depreciation, amortisation and net impairment losses rose 6.2% to C$15.4 million.

The company also recorded C$1.1 million in strategic transformation expenses, related to employee termination benefits and consulting costs associated with restructuring its operating structure.

Flagships Deliver Double-Digit Growth

Despite the overall sales decline, Reitmans reported stronger performance from its physical retail network. Comparable store sales increased during the quarter, while its recently converted Reitmans flagship at Carrefour Laval and the expanded and renovated RW&CO Toronto Eaton Centre flagship each generated double-digit sales growth.

The company said e-commerce revenue declined as it reduced clearance and promotional activity.

The performance comes as Reitmans marks its 100th anniversary in 2026. During the quarter, the company promoted its centennial through its “We’ve Evolved” campaign and a partnership with the WNBA’s Toronto Tempo.

First-Half Revenue Down 0.7%

For the first six months of fiscal 2027, Reitmans reported net revenue of C$371.9 million, down 0.7% from C$374.7 million a year earlier.

Gross profit increased 0.9% to C$213.0 million, while gross margin expanded 90 basis points to 57.3%. Adjusted EBITDA rose 25.0% to C$13.5 million, and net earnings increased 22.6% to C$3.8 million.

Basic and diluted earnings per share for the first half were C$0.08, compared with C$0.06 a year earlier.

The retailer ended the quarter with C$152.7 million in cash and C$149.2 million in working capital. It had no significant long-term debt other than lease liabilities and had not drawn on its bank credit facilities.

Share Buyback Renewed

Reitmans also renewed its normal course issuer bid. During the first half, it purchased 295,300 Class A non-voting shares for C$0.6 million.

Under the renewed programme, approved by the TSX Venture Exchange, the company can purchase up to 3 million Class A non-voting shares between August 5, 2026 and August 4, 2027, representing approximately 10% of the public float.

Reitmans operates 385 stores across Canada under three banners: 216 Reitmans, 85 PENN. and 84 RW&CO.

The company said its priorities remain strengthening the customer experience across store and digital channels, advancing its transformation initiatives and pursuing sustainable, profitable growth.