Clothing retailer Reitmans (Canada) Ltd. said Wednesday that waning consumer confidence hurt sales in the fourth quarter, while profit plummeted 75.8 per cent to $9-million on the impact of Quebec income tax reassessments.
The women's clothier said its earnings amounted to 13 cents a share, compared to 52 cents in the year-earlier period. Stripping out the impact of the tax reassessments, earnings were down 23 per cent to $28.5-million.
Sales in the quarter slid 2.9 per cent to $261.8-million. Same-store sales – a measure of performance at stores open at least a year – fell 5.6 per cent as “global economic conditions deteriorated significantly with confirmation of a recession in both Canada and the U.S.,” Reitmans said in a release.
Eroding consumer confidence “resulted in a downward pressure on retail prices for apparel as concern over inventory levels rose.”
But the retailer added it considers itself “well-positioned” for the future.
“In Canada, we expect that the employment situation will continue to deteriorate for the rest of this calendar year, that general credit and liquidity will remain constrained and that consumer discretionary spending will be curtailed,” Reitmans said.
“We are being guided by these expectations in conducting all facets of our business.”
For the full year, Reitmans reported profit of $85.8-million, or $1.21 a share, down 25.3 per cent from $114.9-million, or $1.60. Excluding the settlement of income tax reassessments, profit was $107.7-million or $1.50 per share.
Sales fell 0.6 per cent to $1.05-billion and same-store sales decreased 4 per cent.
Reitmans shares were down $1.06 or 9 per cent to $10.44 in morning trading at the Toronto stock market.
