Stock in Indigo Books drops 18% as retailer posts $10.1M loss, low book sales

TORONTO – Indigo Books and Music Inc. shares plunged to their lowest price in more than a year Wednesday, a day after the national retailer reported a $10-million loss and announced plans to suspend its dividend.

Indigo said it will make one more dividend payment then suspend the payout to shareholders due to a period of major store renovations, product development and increased digital investment “to fully bring to life its book lovers lifestyle store concept.”

On the Toronto Stock Exchange, Indigo (TSX:IDG) traded as low as $8.50. The shares recovered somewhat but were down more than 18 per cent at $8.75 at the close, well below the previous 52-week low of $9.06.

Indigo announced after markets closed Tuesday that it will pay a quarterly dividend of 11 cents per common share on Dec. 3 but then suspend the payout to shareholders.

Canada’s largest book retailer had a net loss of $10.1 million, or 39 cents per share, for the 13-week period ended Sept. 28. This compared with a net loss of $4 million, or 16 cents per share, for the same period in 2012.

Revenues for the second quarter declined by 3.3 per cent to $179 million, compared with $186 million in last year’s second quarter.