IDG Indigo Books and Music Inc

TORONTO, Aug. 10, 2022 /CNW/ - Indigo Books & Music Inc. (TSX: IDG), Canada's largest book and lifestyle retailer, reported financial results for the 13-week period ended July 2, 2022 compared to the 13-week period ended July 3, 2021.

Revenue increased $32.5 million, or 18.9%, to $204.6 million compared to $172.1 million in the prior year, exceeding the Company's top-line first quarter performance in the preceding three fiscal years. The Company's total sales growth was driven by the success of Indigo's omnichannel business; a strong recovery in the retail channel where traffic levels continued to normalize, and an ecommerce business that sustained incremental growth of 80% of fiscal 2020 levels. Double-digit growth was generated in both the print and general merchandise businesses. The print business continued to benefit from a resurgence of reading, which the Company has leveraged through the launch of a partnership with TikTok Canada, to further capitalize on the popularity of reading on the platform (#BookTok). The Company's top proprietary brands, OUI, NÓTA™ and LOVE & LORE®, continued to gain prominence in the general merchandise assortment, generating over 30% of the quarter's general merchandise revenue growth and demonstrating the increasing value of the Company's exclusive brand portfolio.

Commenting on the results, CEO Heather Reisman said: "We are pleased to see the positive sales growth, fueled by a steady improvement to store traffic and the continued success of our online business. Our strong customer commitment reinforces the decisions we are making to invest in talent and technology for future profitability".

Adjusted EBITDA for the quarter was a loss of $19.2 million compared to a loss of $14.9 million for the same period last year. This is inclusive of the impact of external COVID-19 support, which totalled $1.0 million in the first quarter, compared to $7.3 million in the first quarter of the prior year. Unfortunately, current macro-economic conditions had a negative impact on margins and costs given supply chain disruptions, higher freight costs and inflationary pressures. The Company also incurred additional costs with investment in technology aimed at driving productivity and growth. These factors impacted the net loss position, which changed by $3.5 million to a net loss of $25.4 million ($0.91 net loss per basic common share), compared to a net loss of $21.9 million ($0.79 net loss per basic common share) in the prior year, which is inclusive of the impact of the above-noted COVID-19 support received.

Indigo will host a conference call for analysts and investors to review these results at 10:00 a.m. (Eastern Time) tomorrow, August 11^th, 2022. The call can be accessed by dialing 416-764-8659 from within the Toronto area, or 1-888-664-6392 outside of Toronto. The eight-digit participant code is 50738052.          

A playback of the call will also be available by telephone until 11:59 p.m. (ET) on August 18^th, 2022. The call playback can be accessed after 12:00 p.m. (ET) on August 11^th, 2022, by dialing 416-764-8677 from within the Toronto area, or 1-888-390-0541 outside of Toronto. The six-digit replay passcode number is 738052 #. The conference call transcript will be archived in the Investor Relations section of the Indigo website, www.indigo.ca.

Statements contained in this news release that are not historical facts are "forward-looking information" within the meaning of applicable Canadian securities legislation. To the extent any forward-looking information constitutes "financial outlooks" within the meaning of applicable Canadian securities laws, such information is being provided as preliminary financial and operational results. Financial outlooks, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to various risks and uncertainties that could cause actual results to differ materially from those expressed in or implied in this news release. Among the key factors that could cause such differences are: general economic, market or business conditions, which include geopolitical events such as war, acts of terrorism, and civil disorder and the adverse impacts of inflationary pressures; the future impacts and government response to the COVID-19 pandemic, including any impact to online and/or retail operations of the Company; competitive actions by other companies; changes in laws or regulations; and other factors, many of which are beyond the control of the Company, as set out in the Company's annual information form dated June 2, 2022 and available on the Company's issuer profile on SEDAR at www.sedar.com.

Undue reliance should not be placed on such forward-looking information and no assurance can be given that such events will occur in the disclosed time frames or at all. Any forward-looking information included in this news release is made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.

The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS"). In order to provide additional insight into the business, the Company has also provided non-IFRS data, specifically adjusted EBITDA, in this news release. These measures do not have standardized meanings prescribed by IFRS and are therefore specific to Indigo and may not be comparable to similar measures presented by other companies. 

For additional context see "Results of Operations" and "Non-IFRS Financial Measures" in the Management's Discussion and Analysis (which can be found at www.indigo.ca/investor-relations or www.sedar.com).

Indigo is a publicly traded Canadian company listed on the Toronto Stock Exchange (IDG). Indigo is Canada's leading book and lifestyle retailer, offering a curated assortment of books, gifts, baby, kids, wellness and lifestyle products, that support their customers every day and at key life stages by simplifying their journey to live with intention. Indigo believes in real books, in living life fully and generously, in being kind to each other and that stories – big and little – connect us.

The Company supports a separate registered charity, called the Indigo Love of Reading Foundation (the "Foundation"), which is committed to addressing educational inequality, and more specifically the literacy crisis in Canada. The Foundation runs two annual national granting programs: the Literacy Fund Grant, which is a multi-year grant provided to high-needs schools across the country; and the Adopt a School program, a grassroots fundraising initiative that unites Indigo, its retail stores, Indigo's staff, local schools, and their communities. In the wake of the COVID-19 pandemic and the unprecedented nation-wide school closures, the Foundation committed $1.0 million to provide books to families in need. With the support of the Company, its customers, employees, and suppliers, the Foundation has committed over $35.0 million to more than 3,500 high-needs elementary schools across Canada since 2004. The Foundation is dedicated to raising awareness about the critical importance of children's literacy while providing essential literary support to high-needs children across Canada.

To learn more about Indigo, please visit the "Our Company" section at indigo.ca.

The following table reconciles adjusted EBITDA to net loss before income taxes, the most comparable IFRS measure:

SOURCE Indigo Books & Music Inc.