Groupe Dynamite sees ‘nominal’ impacts from war but bracing for more

Clothing brands Garage and Dynamite are so far seeing “really nominal” cost increases, driven by strife in the Middle East, but that burden could grow the longer the conflict drags on, said the CEO of the company behind the retailers.

The price of fuel has risen as the Strait of Hormuz, one of the world’s biggest oil passageways, remains stymied by attacks the U.S., Israel and Iran are carrying out.

“We’re totally in a position to address it — and I’m not saying absorb it — I’m saying address it,” Groupe Dynamite Inc. chief executive Andrew Lutfy told analysts on a conference call Wednesday of the rising fuel costs. 

“But … the longer this Middle East war persists, obviously the greater the impact is going to be.”

Lutfy’s remarks came hours after Groupe Dynamite Inc. revealed its fourth-quarter profit more than doubled compared with a year earlier as its revenue jumped 45 per cent.

The Montreal-based retailer earned $79.4 million or 69 cents per diluted share for the quarter ended Jan. 31, up from a profit of $31 million or 28 cents per diluted share a year earlier.

On an adjusted basis, it earned 71 cents per share in its latest quarter, up from an adjusted profit of 33 cents per share in the fourth quarter of 2024.

Revenue for the quarter totalled $394.2 million, up from $271.8 million in the same quarter last year. Comparable store sales growth for the quarter was 30.4 per cent.

The quarter covered a period leading up to Garage’s U.K. debut. It opened stores at Bluewater Shopping Centre and on London’s Oxford Street in March. 

When the brand opened the Bluewater location in a suburb about an hour and a half from London’s centre, president and chief operating officer Stacie Beaver said there was “an electric environment,” where people lined up at 7 p.m. the night before to shop at 10 a.m. the next day.

“We had a line in both stores the full weekend that we were open, from Friday to Sunday, so we know the brand excitement is there and we’re hoping to capitalize on it,” she said on the same call as Lutfy.

The company expects to open between 24 and 26 new stores overall, including five locations in the U.K., in its next fiscal year, but will close about 14 locations. 

“It’s worth noting the vast majority of stores we do close are in fact profitable,” Lutfy explained. “They’re just not profitable enough and they create burdens on our teams and inventories.”

Most of the openings will be in the U.S. under the Garage banner. He wants to have 350 stores open globally by Groupe Dynamite’s fiscal 2028. 

In its outlook for 2026, his company also said it expects comparable store sales growth between 11 and 14 per cent, while total revenue growth is forecast between 22 and 25 per cent.

This report by The Canadian Press was first published April 1, 2026.

Companies in this story: (TSX:GRGD)