Birks Group Inc. Reports Mid-year Fiscal 2025 Results
MONTREAL--(BUSINESS WIRE)--November 27, 2024--
Birks Group Inc. (the "Company" or "Birks Group") (NYSE American: BGI), today reported its financial results for the twenty-six-week period ended September 28, 2024.
Highlights
All figures presented herein are in Canadian dollars.
For the twenty-six-week period ended September 28, 2024 ("Fiscal 2025"), the Company reported net sales of $80.1 million, a decrease of $7.7 million or 8.8% from the comparable prior period ended September 23, 2023 ("Fiscal 2024"). Comparable store sales for the twenty-six-week period ended September 28, 2024, decreased by 4.9% compared to the corresponding period of Fiscal 2024. The decrease in net sales and comparable store sales is mainly due to lower sales of branded jewelry due to the exit of a brand from two stores. When excluding the third-party jewelry brand movement, the comparable store sales increased by 7.5%, mainly driven by timepiece sales. The Company reported a gross profit of $31.3 million, a decrease of $4.8 million or 13.3% compared to the corresponding period in Fiscal 2024, due to lower sales volume resulting from the exit of a jewelry brand from two stores. Gross profit as a percentage of sales was 39.0% for the twenty-six week period ended September 28, 2024, a decrease of 210 basis points from the gross profit as a percentage of sales of 41.1% in the twenty-six-week period ended September 23, 2023.
Mr. Jean-Christophe Bédos, President and Chief Executive Officer of Birks Group, commented: "Although our net sales and comparable store sales for the first half of Fiscal 2025 are lower than the corresponding period in Fiscal 2024, when excluding the effect of the third-party jewelry brand movement, comparable store sales are positive. We are pleased with the renovation projects that were undertaken in the last year at our Chinook and Laval stores as they continue to generate greater sales post opening which also contributed to our results."
Financial overview for the twenty-six-week period ended September 28, 2024
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Total net sales for the twenty-six-week period ended September 28, 2024
were $80.1 million compared to $87.8 million for the twenty-six-week
period ended September 23, 2023, a decrease of $7.7 million or 8.8%. This
sales decrease is attributable primarily to the decrease in sales of
branded jewelry related to a brand exit from two stores, offset by an
increase in branded timepieces sales.
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Comparable store sales decreased by 4.9% during the twenty-six-week
period ended September 28, 2024 compared to the twenty-six-week period
ended September 23, 2023. The decrease in comparable store sales is
mainly attributable to a third-party jewelry brand movement. When
excluding the third-party jewelry brand movement, the comparable store
sales increased by 7.5%, mainly driven by timepiece sales.
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Total gross profit was $31.3 million, or 39.0% of net sales, for the
twenty-six-week period ended September 28, 2024, compared to $36.1
million, or 41.1% of net sales for the twenty-six-week period ended
September 23, 2023. This decrease of $4.8 million in gross profit is
primarily attributable to lower sales volume in the retail segment,
specifically in branded jewelry, mainly due to a brand exit. The decrease
in gross profit percentage of 210 basis points is due to higher packaging
and service costs, an increase in foreign exchange loss of $0.2 million
from the comparable period in Fiscal 2024, partially offset by a
favorable product mix in branded timepieces.
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SG&A expenses in the twenty-six-week period ended September 28, 2024
were $27.8 million, or 34.7% of net sales, compared to $32.5 million, or
37.0% of net sales in the twenty-six-week period ended September 23,
2023, a decrease of $4.7 million. The main drivers of the decrease in
SG&A expenses in the period include lower marketing costs ($1.5 million)
mainly due to lower brand development initiatives, lower occupancy costs
($2.1 million) due to store closures and store lease modifications, lower
compensation costs ($0.3 million) due to lower sales volume and head
count reduction, lower credit card fees ($0.3 million) and lower delivery
and transport costs ($0.1 million) due to lower sales volume and a
decrease in general and variable operating costs ($0.8 million). This
decrease was partially offset by greater stock-based compensation ($0.4
million) mainly related to the fluctuation of the stock price. As a
percentage of sales, SG&A expenses in the twenty-six-week period ended
September 28, 2024 have decreased by 2.6% as compared to the
twenty-six-week period ended September 23, 2023.
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The Company recognized a net loss for the twenty-six-week period ended
September 28, 2024 of $3.1 million, or ($0.16) per share, compared to a
net loss for the twenty-six-week period ended September 23, 2023 of $1.5
million, or ($0.08) per share.
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The Company's EBITDA (1) for the twenty-six-week period ended September
28, 2024 was $4.7 million, a decrease of $0.3 million, compared to
EBITDA(1) of $5.0 million for the twenty-six-week period ended September
23, 2023; and
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The Company reported an operating loss of $0.3 million for the
twenty-six-week period ended September 28, 2024, a decrease of $0.8
million, compared to a reported operating income of $0.5 million in the
twenty-six-week period ended September 23, 2023.
(1) This is a non-GAAP financial measure defined below under "Non-GAAP
Measures" and accompanied by a reconciliation to the most directly
comparable U.S. GAAP financial measure.
About Birks Group Inc.
Birks Group is a leading designer of fine jewelry, and an operator of luxury jewelry, timepieces and gifts retail stores in Canada. The Company operates 18 stores under the Maison Birks brand in most major metropolitan markets in Canada, one retail location in Montreal under the Birks brand, one retail location in Montreal under the TimeVallée brand, one retail location in Calgary under the Brinkhaus brand, one retail location in Vancouver operated under the Graff brand, one location in Vancouver under the Patek Philippe brand, and three retail locations in Laval, Ottawa and Toronto under the Breitling brand. Birks fine jewelry collections are also available through select SAKS Fifth Avenue stores in Canada and the U.S., select Mappin & Webb and Goldsmiths locations in the United Kingdom, in Mayors stores in the United States, in W. Kruk stores in Poland as well as several jewelry retailers across North America. Birks was founded in 1879 and has become Canada's premier retailer and designer of fine jewelry, timepieces and gifts. Additional information can be found on Birks' web site, www.birks.com.
NON-GAAP MEASURES
The Company reports financial information in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"). The Company's performance is monitored and evaluated using various sales and earnings measures that are adjusted to include or exclude amounts from the most directly comparable GAAP measures ("non-GAAP measures"). The Company presents such non-GAAP measures in reporting its financial results to assist in business decision making and to provide key performance information to senior management. The Company believes that this additional information provided to investors and other external stakeholders will allow them to evaluate the Company's operating results using the same financial measures and metrics used by the Company in evaluating performance. The Company does not, nor does it suggest that investors and other external stakeholders should, consider non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. These non-GAAP measures may not be comparable to similarly-titled measures presented by other companies. In addition to our results determined in accordance with U.S. GAAP, we use non-GAAP measures including "EBITDA".
EBITDA
"EBITDA" is defined as net income (loss) from continuing operations before interest expense and other financing costs, income taxes expense (recovery) and depreciation and amortization.
EBITDA
(in thousands)
For the twenty-six-week period ended
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September 28, 2024 September 23, 2023
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Net (loss) income (U.S.
GAAP measure) (3,081) (1,482)
as a % of net sales -3.8% -1.7%
Add the impact of:
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Interest expense and
other financing costs 4,034 3,350
Depreciation and
amortization 3,701 3.089
EBITDA (non-GAAP
measure) $ 4,654 $ 4,957
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as a % of net sales 5.8% 5.6%
Forward Looking Statements
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