Roots Q1 sales hit by DTC

Canadian lifestyle brand Roots recently reported a 9.7 per cent decline in sales, totaling US $ 37.5 million for the first quarter, attributed to lower direct-to-consumer (DTC) sales over the three months.

The lifestyle brand indicated that DTC sales, which include retail store and e-commerce sales, were US $ 31.4 million, down 11.3 per cent year-over-year. This decline was driven by fewer markdown sales due to an improved inventory position compared to the previous year.

While there was growth in full-price seasonal collection sales, it was offset by missed sales opportunities in core fleece collections due to inventory shortages stemming from stronger-than-anticipated demand in the prior quarter. Additionally, the company lost US $ 0.6 million in sales due to the temporary renovation closures of two larger corporate retail stores and a tightening of consumer discretionary spending in the current macroeconomic environment, according to a press release.

P&O sales (wholesale Roots-branded products, licensing to select manufacturing partners, and the sale of certain custom products) reached US $ 6.1 million during the three months ending 4th May.

A decline in royalties from licensing the Roots brand to select manufacturing partners was largely offset by growth in wholesale sales to the company’s international operating partner in Taiwan.

Net losses widened during the quarter to US $ 8.9 million, compared to a loss of US $ 8 million in the same period the previous year.