Canadian clothing retailer Roots (TSE:ROOT) has reported financial results that beat analysts’ expectations on the top and bottom lines.
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The company, known for its logo that features a beaver on it, announced fiscal fourth-quarter earnings per share (EPS) of $0.42, which topped the consensus expectation of analysts that called for $0.41. Revenue in the period totaled $115.5 million, which topped the $114 million forecast on Wall Street. Sales were up 4.2% from a year earlier.
Management highlighted that direct-to-consumer sales increased 5.7% to $107 million in the most recent quarter. The latest financial results also marked a return to profitability for Roots, which had posted a string of net losses in recent quarters.
Strategic Review at Roots
Last month, Roots launched a strategic review that could involve a sale of the company. CEO Meghan Roach said on the company’s earnings call with analysts and media that the company is “pleased with the level of interest and engagement in this process,” referring to a possible sale.
“We delivered strong sales growth, record gross margins, and improved profitability, while making deliberate investments in the brand’s long-term positioning,” said Roach on the call. “Our results reflect the cumulative impact of a consistent and focused strategy…”
Is ROOT Stock a Buy?
Not enough analysts offer ratings and price targets on ROOT stock. So instead, we’ll look at the three-month share price performance. As one can see in the chart below, Root’s stock has gained 26% in the last 12 weeks, or since the company announced that it’s available for sale.
