Roots not seeing ‘pullback’ in consumer spending as retailer reports $7.9M Q1 loss

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This article was published 13/06/2025 (288 days ago), so information in it may no longer be current.

TORONTO – Consumers grappling with a global tariff war have yet to drop Roots Corp. from their shopping trips, the apparel retailer’s CEO said Friday, as the company reported a $7.9 million loss.

“We haven’t seen any weakening and no pullback,” Meghan Roach told analysts who asked her whether consumer confidence has been lagging or if customers were trading down for more affordable products.

Her observation was reflected in the retailer’s first-quarter results, which showed sales at the Toronto-headquartered company rose 6.7 per cent to $40 million.

Much of the boost came from the company’s direct-to-consumer business, which includes its retail stores and e-commerce operations. 

Sales from that division totalled $34.6 million for the period ended May 3, up from $31.4 million a year earlier. The segment also saw comparable sales growth of 14.1 per cent.

Roach attributed the increase to existing products resonating with customers who she said responded well to the company’s latest releases, too.

“We were also seeing strong adoption of updated cuts, which offer a modern take on comfort while staying true to the brand’s DNA,” she said.

“This momentum in our core collection and the success of our new programs gives us confidence as we continue to balance innovation with the consistency your customers expect from us.”

Meanwhile, partner and other sales, which include wholesale Roots branded products, licensing to select partners and certain custom products, fell to $5.4 million, compared with $6.1 million in the same quarter last year.

Overall, Roots reported a first-quarter loss of $7.9 million compared with a loss of $8.9 million a year earlier as its sales rose 6.7 per cent.

The loss amounted to 20 cents per share for the quarter compared with a loss of 22 cents per share in the same quarter last year.

The results fit Roots’ usual cadence, Roach said. Typically, the company generates 30 per cent of its sales in the first half of the year, when it tends to generate a loss. The back half usually brings profit.

This year Roots has been working to close “underperforming” stores and reallocate resources to “high potential” locations where the brand is resonating and there are opportunities for traffic growth.

Customer feedback and in-store analytics have also pushed the company to give some stores a makeover that has introduced new layouts, digital tools and modern materials and finishes into flexible fixtures meant to help the brand transition between seasons.

“The goal is to create a more immersive, intuitive, and inspiring retail environment, one that aligns with our brand direction and deepens emotional connection with customers,” Roach said.

This report by The Canadian Press was first published June 13, 2025.

Companies in this story: (TSX:ROOT)