- Roots (TSX:ROOT) announced impressive Q3 results highlighted by increased sales, lower debt and stable net income
- The quarter builds conviction in continued value creation through the Christmas season
- Roots, est. 1973, is a Canadian lifestyle brand specializing in apparel, leather goods, footwear and accessories
- The retail stock has added 66.18 per cent year-over-year and 34.52 per cent since 2020
Roots (TSX:ROOT), one of Canada’s quintessential apparel brands, announced impressive Q3 results ending November 1, 2025, highlighted by increased sales, lower debt and stable net income, building conviction in continued value creation through the Christmas season. Here are the year-over-year highlights:
- Sales of C$71.5 million, up 6.8 per cent, driven by strong customer engagement, thoughtfully curated product assortment and enhancements to the omnichannel customer experience.
- Gross margin of 60.8 per cent, up by 0.8 per cent, thanks to improved costing, lower discounting and improved freight costs.
- Net income of C$2.3 million, down by 4.5 per cent, impacted by cash settled instruments under the company’s share-based compensation plan.
- Adjusted EBITDA of C$7.5 million, up by 5.3 per cent.
- Inventory was C$66.6 million, up from C$60.4 million, reflecting higher foreign exchange and preparations for peak holiday selling periods.
- Net debt of C$44.1 million, down by 5.9 per cent.
- Liquidity of C$34.5 million, including net cash and borrowing capacity under a revolving credit facility.
- Buybacks of 415,200 common shares worth C$1.3 million. The company may repurchase up to 1,347,118 shares during the year ending April 10, 2026, with 1,022,000 shares valued at C$3.2 million repurchased as of Q3.
Roots’ strong quarter builds upon the company’s uninterrupted profitability over the past five years, viewing the fiscal 2024 impairment charge as an accounting requirement with no effects on fundamentals, showing a strong balance sheet ready to accommodate heightened Christmas demand driven by new store openings in Toronto and Vancouver, new Fall and Winter product launches, as well as paid media with high-profile brand ambassadors, including Seth Rogen.
Check out a full breakdown of Roots’ Q3 Fiscal 2025 results in Wednesday’s news release.
Management commentary
“Roots delivered strong third-quarter results, with growth driven by consumers’ positive response to our products, enhanced marketing efforts and improved in-store execution,” Meghan Roach, president and chief executive officer of Roots, said in a statement. “Even in a dynamic retail environment, our heritage, quality and focus on comfort continued to differentiate the brand and drive engagement across our omnichannel platform. We remain disciplined in execution and committed to strengthening the foundations of the brand to support long-term value creation. While early in the fourth quarter, we continue to experience positive trends.”
“Our disciplined approach to investing in strategic growth continues to deliver results,” commented Leon Wu, chief financial officer of Roots. “We have sustained positive sales momentum and maintained the underlying margins of those sales, supporting a stronger balance sheet with year-over-year reductions in net debt.”
About Roots
Roots, est. 1973, is a Canadian lifestyle brand specializing in apparel, leather goods, footwear and accessories with more than 100 stores across the country, in addition to two in the United States and more than 100 partner-operated locations in Asia.
Roots stock (TSX:ROOT) last traded at C$3.39, returning 66.18 per cent year-over-year and 34.52 per cent since 2020.
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