News

Indigo narrows full-year loss to $3.5M; revenue improves despite fewer stores

TORONTO – Indigo Books & Music Inc. (TSX: IDG) improved its fourth-quarter and full-year net loss as Canada’s largest book, gift and specialty toy retailer reported improved revenue and margins in both periods.

Indigo reported after markets closed Tuesday that its net loss for the quarter was $13.9 million, down from $14.4 million from the year-earlier period as revenue rose $1.9 million to $186.2 million.

The company said in its earnings statement that the improvement in earnings was a result of higher revenues, margin rate and lower operating expenses, offset by increased long-term incentive costs.

For the full year, Indigo narrowed its net loss to $3.5 million from $31 million, citing $27.7 million in revenue growth to $895.4 million despite eight fewer stores, along with an improved margin rate, lower operating expenses and lower tax expense.

On a comparable store basis, an important metric in the retail industry, Indigo and Chapters superstore revenue increased 6.8 per cent on the year, while Coles and Indigospirit small format store revenue increased just under one per cent. Sales from indigo.ca grew by 11.8 per cent.

The company said its core books business returned to growth despite having no major hit titles during the year.

Its lifestyle, paper and toys business experienced double-digit growth, while the launch of the American Girl line of dolls and other products during the year “far exceeded expectations,” the company said.