Roots reports 3.5% sales drop in 2023

Canadian outdoor lifestyle brand Roots announced on Wednesday a 3.5% decrease in total sales, for the fiscal year 2023. 

The Toronto-based company said sales decreased to $262.7 million for the year ended February 3, 2024. Net income totaled $1.8 million, a decline from $6.7 million in the previous year, reflecting the broader economic challenges faced during this period.

Likewise, Roots also experienced a decline in total sales in its fourth quarter, with figures dropping by 2.9% year-over-year to $108.2 million. 

Despite this, the company’s direct-to-consumer segment, which includes corporate retail store and e-commerce sales, maintained stability, with a modest 0.8% decrease to $97.8 million. The company saw sales growth in core fleece and active categories, which were offset by declines in certain seasonal collections, including colder weather outerwear and accessories.

Net income saw an increase, totaling $14.6 million, up from $13.0 million in Q4 2022. 

“As we close another year, I want to acknowledge the resilience and hard work of the team at Roots in the face of a challenging economic environment. We continue to take significant steps to enhance our operations, strengthen our relationships with our customers, and make exceptional products. I remain confident in the longer-term growth prospects for the brand as the market normalizes,” said Meghan Roach, president and CEO of Roots.

“We have reduced our inventory balance by 34% year-over-year while maintaining our gross profit margin,” added Leon Wu, chief financial officer. 

”This achievement has notably strengthened our cash flow, which led to a 32% reduction in net debt. As we enter fiscal 2024, our robust balance sheet provides us with the flexibility to strategically purchase inventory to address consumer demand while navigating through the short-term macroeconomic headwinds.”

During the year, Roots named Leslie Golts as its chief marketing officer. Golts joined the global lifestyle brand from Unilever Canada’s Beauty & Wellness Business Unit, where she served as the general manager and head of marketing.