- The future of Canadian fashion label Le Château (CTU) remains unclear after the company revealed steep losses in its full-year financial report
- Full year sales dropped 7.8 per cent to C$175.9 million, when compared to 2019’s same period
- The decrease in sales translated to a net loss of $69.2 million, a dramatic drop when compared to a net loss of $23.8 million in 2019’s financial year
- As a result, the company stated that its ability to continue operating for the next 12 months is a going concern
- Le Château (CTU) is down 20 per cent and is trading at four cents per share
The future of Canadian fashion label Le Château (CTU) remains unclear after the company revealed steep losses in its full-year financial report.
Full year sales dropped 7.8 per cent to C$175.9 million, when compared to 2019’s same period. The company closed 10 locations across Canada during the year, which partially caused the subsequent drop in sales.
Even so, comparable store sales, which would not be affected by store closures, were also down 3.8 per cent versus the previous corresponding period. However, digital sales continue to perform strongly and were up a further 20.8 per cent during the year.
The decrease in sales translated to a net loss of $69.2 million, a dramatic drop when compared to a net loss of $23.8 million in 2019’s financial year.
Although losses increased and sales dropped, the company’s adjusted earnings before interest, taxes, depreciation, and amortization rose significantly during the year.
The company posted an adjusted EBITDA of just over $18 million, compared to a negative adjusted EBITDA of $5.6 million in 2019’s financial year.
However, this improved figure was largerly the result of a $29.6 million positive impact from financial reporting standards and, ignoring the figure, earnings actually dropped to a negative $11.5 million, almost double the previous year’s loss.
As a result of these poor figures the company stated that its ability to continue for the next 12 months is a going concern and it will require some level of further financing.
To continue operating the company will also need to renegotiate terms with its lending partners and landlords.
Le Château (CTU) is down 20 per cent and is trading at four cents per share at 1:26pm EDT.
