Reitmans (Canada) (RET) AI Stock Analysis

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Reitmans (Canada)

(RET)

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Neutral 60 (OpenAI - 4o)

Rating:60Neutral

Price Target:

C$2.00

▼(-4.76% Downside)

Reitmans (Canada) scores a 60, reflecting a mixed outlook. The company's financial stability and strategic initiatives are positive, but these are countered by high valuation concerns, declining profitability, and neutral technical indicators. The earnings call further highlighted financial challenges, impacting the overall score.

Reitmans (Canada) (RET) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$106.34M

Dividend YieldN/A

Average Volume (3M)3.80K

Price to Earnings (P/E)128.8

Beta (1Y)0.47

Revenue Growth-3.57%

EPS Growth-95.88%

CountryCA

Employees6,812

SectorConsumer Cyclical

Sector Strength84

IndustryApparel - Retail

Share Statistics

EPS (TTM)0.26

Shares Outstanding13,440,000

10 Day Avg. Volume4,691

30 Day Avg. Volume3,800

Financial Highlights & Ratios

PEG Ratio-0.59

Price to Book (P/B)0.40

Price to Sales (P/S)0.15

P/FCF Ratio1.64

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$2.00

Price Target Upside-4.76% Downside

Rating ConsensusHold

Number of Analyst Covering1

Reitmans (Canada) Business Overview & Revenue Model

Company DescriptionReitmans (Canada) Limited primarily engages in the retail sale of women's wear apparel in Canada. It also offers apparel for men. The company serves customers through retail and e-commerce channels. As of April 21, 2022, it operated 404 stores, including 237 Reitmans, 90 Penningtons, and 77 RW&CO. The company was founded in 1926 and is headquartered in Montreal, Canada.

How the Company Makes MoneyReitmans (Canada) Limited generates revenue primarily through the sale of women's apparel and accessories. The company operates a network of retail stores across Canada and has a significant online presence, allowing it to reach a broad customer base. Revenue streams include direct sales from physical stores and e-commerce platforms. The company focuses on creating appealing and trend-responsive fashion lines that attract a wide range of customers. Partnerships with designers and marketing initiatives enhance its brand visibility and drive sales. Additionally, Reitmans manages its inventory and supply chain efficiently to maintain competitive pricing, which is crucial for sustaining profitability in the retail sector.

Reitmans (Canada) Earnings Call Summary

Earnings Call Date:Sep 18, 2025

(Q1-2026)

% Change Since: |

Next Earnings Date:Dec 18, 2025

Earnings Call Sentiment Negative

The earnings call presented a mixed outlook with several positive strategic initiatives, such as the growth in e-commerce revenue and digital modernization efforts. However, these were overshadowed by significant financial challenges, including a decline in net revenues and an increase in losses. Despite maintaining a strong financial position with no long-term debt, the overall financial performance was disappointing.

Q1-2026 Updates

Positive Updates

E-commerce Revenue Growth

Achieved a 1% increase in e-commerce revenue, indicating strength in online sales despite a challenging environment.

Strategic Store Openings

Opened 6 new stores, including new Reitmans, RW&CO, and PENN locations, with positive performance observed in new openings.

Digital Modernization Initiatives

Commenced the first phase of a digital strategic road map, including migration to Shopify, aiming for enhanced customer experiences.

No Long-Term Debt

Maintained a solid financial position with no long-term debt, apart from lease liabilities.

Normal-Course Issuer Bid Renewal

Announced the intention to renew the normal-course issuer bid, returning $800,000 to shareholders since the previous bid.

Negative Updates

Decline in Total Net Revenues

Total net revenues fell by 4.1% to $158.9 million, impacted by reduced in-store traffic and cautious consumer spending.

Adjusted EBITDA Loss

Reported an adjusted EBITDA loss of $10.6 million, compared to a positive $900,000 in the previous year.

Increased Net Loss

Net loss for the quarter widened to $10 million, or $0.20 per share, from a loss of $1.5 million or $0.03 per share a year ago.

SG&A Expenses Increase

SG&A expenses increased by 4.2%, driven by a $1.9 million increase in occupancy cost and an $800,000 increase in-store personnel costs.

Gross Profit and Margin Decline

Gross profit decreased by $5.4 million to $88.5 million, with a gross profit margin down 100 basis points to 55.7%.

Company Guidance

During the Fiscal 2026 First Quarter Earnings Call for Reitmans Canada Limited, several key metrics and strategic initiatives were discussed. The company reported a 4.1% decrease in total net revenues to $158.9 million, attributed to reduced in-store traffic and cautious consumer spending amid economic uncertainty. Despite achieving a 1% increase in e-commerce revenue, overall comparable sales, including e-commerce, decreased by 4.5%. Gross profit declined by $5.4 million to $88.5 million, with a 100 basis point drop in the gross profit margin to 55.7%. Adjusted EBITDA showed a loss of $10.6 million, while the net loss widened to $10 million. As part of its strategic plan, Reitmans aims to achieve $1 billion in annual revenues by the end of fiscal 2030 and grow adjusted EBITDA to between $60 million and $70 million, driven by efficiency improvements and product speed to market. The company plans to reinvest approximately $100 million in growth initiatives over the next five years, with 75% allocated towards store investments and 25% towards digital modernization.

Reitmans (Canada) Financial Statement Overview

Summary

Reitmans (Canada) shows financial stability with a strong equity base and effective cash management. However, profitability is challenged by low margins and declining revenues, necessitating improvements in operational efficiency and revenue growth.

Income Statement

Positive

Reitmans (Canada) has demonstrated a moderate level of stability in its income statement. The TTM Gross Profit Margin is approximately 56%, indicating effective cost management, although a decline from the previous year. The TTM Net Profit Margin is low at around 0.5%, reflecting thin profitability. Revenue has decreased by around 0.9% compared to the previous year, indicating a slight decline. The EBIT Margin is about 1.1%, and the EBITDA Margin stands at 8.8%, both of which suggest limited operational efficiency improvements are needed.

Balance Sheet

Positive

Reitmans (Canada) shows a stable balance sheet with a Debt-to-Equity Ratio of 0.55, indicating conservative leverage. The Return on Equity (ROE) is low at approximately 1.3%, reflecting modest profitability. The Equity Ratio stands at about 54.6%, denoting a solid equity base relative to assets, which is a positive indicator of financial stability.

Cash Flow

Positive

The cash flow position of Reitmans (Canada) is relatively strong. The TTM Free Cash Flow to Net Income Ratio is high, indicating strong cash conversion. The Operating Cash Flow to Net Income Ratio is robust, showing effective cash management. However, the Free Cash Flow Growth Rate is negative, highlighting a decline in free cash flow compared to the previous year.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	766.96M	773.80M	794.69M	661.95M	533.36M	869.50M
Gross Profit	429.55M	435.04M	431.00M	353.17M	246.25M	444.39M
EBITDA	67.39M	78.44M	76.22M	94.70M	194.46M	-41.58M
Net Income	3.60M	12.14M	14.81M	158.26M	-172.22M	-87.43M
Balance Sheet
Total Assets	511.76M	574.09M	490.75M	314.27M	397.23M	560.17M
Cash, Cash Equivalents and Short-Term Investments	85.43M	158.12M	116.65M	25.50M	77.92M	89.41M
Total Debt	153.09M	155.40M	137.59M	81.94M	123.22M	213.87M
Total Liabilities	232.12M	277.66M	211.73M	130.45M	375.55M	366.35M
Stockholders Equity	279.63M	296.43M	279.02M	183.83M	21.68M	193.82M
Cash Flow
Free Cash Flow	23.73M	73.06M	51.83M	-35.38M	34.03M	53.70M
Operating Cash Flow	60.55M	104.26M	69.53M	-24.73M	40.20M	77.18M
Investing Cash Flow	-36.82M	-31.19M	-17.70M	-15.22M	-6.16M	17.95M
Financing Cash Flow	-44.28M	-40.03M	-39.90M	-9.19M	-46.82M	-121.78M

Reitmans (Canada) Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price2.10

Price Trends

50DMA

2.07

Positive

100DMA

2.21

Negative

200DMA

2.37

Negative

Market Momentum

MACD

<0.01

Negative

RSI

52.33

Neutral

STOCH

43.48

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RET, the sentiment is Neutral. The current price of 2.1 is above the 20-day moving average (MA) of 2.07, above the 50-day MA of 2.07, and below the 200-day MA of 2.37, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 52.33 is Neutral, neither overbought nor oversold. The STOCH value of 43.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:RET.

Reitmans (Canada) Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATZ	80 Outperform	8.20B	41.50	20.76%	―	22.57%	197.68%
RET	60 Neutral	C$106.34M	128.83	0.35%	―	-3.57%	-95.88%
ROOT	59 Neutral	135.47M	-4.37	-20.96%	―	4.47%	-3217.53%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

* Consumer Cyclical Sector Average

Performance Comparison

TSE:RET

Reitmans (Canada)

2.15

-0.47

-17.94%

TSE:ROOT

Roots Corporation

3.41

1.29

60.85%

ATZAF

Aritzia

61.44

25.05

68.84%

Reitmans (Canada) Corporate Events

Executive/Board ChangesShareholder Meetings

Reitmans (Canada) Limited Elects Board of Directors at Annual Meeting

Neutral

Jun 18, 2025

Reitmans (Canada) Limited announced the election of its board of directors during the Annual General Meeting of Shareholders in Laval, Québec. All director nominees listed in the Management Proxy Circular were elected, indicating strong shareholder support. This election is significant for the company’s governance as it continues to maintain its position as a prominent apparel retailer in the Canadian market.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 23, 2025