Roots CEO touts retailer’s progress as strategic review continues

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This article was published 09/04/2026 (185 days ago), so information in it may no longer be current.

TORONTO – The CEO of Roots Corp. highlighted the retailer’s progress in improving its profitability as the business pushes on with its strategic review.

In a conference call with financial analysts to discuss the company’s latest results on Thursday, Meghan Roach said she feels the last few years have marked a “successful repositioning of Roots as a premium brand.”

After she joined in 2019, the Toronto-based business known for its casualwear and leather goods began moving away from markdowns and fashioning itself into more of a prestige brand. 

Roach said back then, the company’s gross margin was 53.4 per cent and more than 60 per cent of customers purchased something on sale. Now, that key measure of profitability is about 61.3 per cent and more than 70 per cent of customers are making full-price purchases.

Roach touted the gains roughly a month after the apparel company revealed its board was launching a strategic review in hopes of finding ways to maximize value for shareholders.

The company has said the board would study a range of possibilities including, but not limited to, a sale and would not make incremental updates on the review.

Roach reiterated those points Thursday, saying “there can be no assurances that the review will result in any specific action, transaction or agreement.”

“The management team remains dedicated to executing on our strategic priorities, and to operate the business in the best interests of all stakeholders,” she said.

Brian Morrison, an analyst with TD Cowen, said in a note to investors that he thinks there’s a high probability the company will emerge from the review with a new means of “monetization” because “Roots is an iconic Canadian brand with a proven ability to generate consistent, attractive free cash flow.” 

The retailer was started by Michigan natives Michael Budman and Don Green, who met at an Ontario summer camp in the sixties and decided to open what eventually became Roots north of the border in 1973.

They sold a majority stake in Roots in 2015 to private equity firm Searchlight Capital Partners L.P., where Roach was previously a managing director, and by 2017, the retailer had gone public on the Toronto Stock Exchange.

On Thursday, Roots reported sales for its fourth quarter totalled $115.5 million, up from $110.8 million. Direct-to-consumer sales amounted to $107 million, up from $101.2 million, while partners and other sales amounted to $8.5 million, down from $9.6 million.

Overall, the company reported a profit of $14.7 million or 37 cents per share for the quarter ended Jan. 31. That compared with a loss of $21.7 million or 54 cents per share a year earlier when it took a non-cash impairment charge.

On an adjusted basis, Roots earned 42 cents per share compared with an adjusted profit of 40 cents per share in the same quarter last year.

The results covered the typically busy holiday season, which arrived this time as trade tensions continued to fester and according to Roach, made the consumer environment “dynamic.”

“But it’s no different than really what we’ve seen over the last three years,” she said. “It seems like every year, there’s something new that happens.”

This report by The Canadian Press was first published April 9, 2026.

Companies in this story: (TSX:ROOT)