Roots Corp. · TSX:ROOT
Roots — Q4 2024 Earnings Presentation
23 slides from Roots's earnings presentation, Apr 9, 2025
Slide 1: Investor Presentation Q4 2024
Investor Presentation Q4 2024 April 9, 2025 PAGE 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain information in this presentation contains forward-looking information. This information is based on management’s reasonable assumptions and beliefs in light of the information currently available to us and are made as of April 8, 2025. Actual results and the timing
Slide 3: Our Mission
OUR MISSION To Inspire the World to be At Home with Nature PAGE 3
Slide 4: Our Roots
Our Roots Roots was founded in 1973 by Michael Budman and Don Green, who met at summer camp in Algonquin Park, where they first fell in love with the ideals and beauty of Canada. Starting from a little cabin, they were inspired by nature and Canada's wilderness to create Roots. With its uncompromisi
Slide 5: Our History
Our History 1973 1980 1998 2015 2020 2023 Michael Budman and Roots moves onto its Roots has created the Searchlight Capital New executive Roots launched 50th Don Green founded core business – Olympic outfits of Partners acquires leadership team. anniversary celebrations Roots, centered selling athle
Slide 6: Iconic Canadian Brand with a Global Community
Iconic Canadian Brand with a Global Community 1 Rich heritage of delivering high-quality, versatile and stylish products to customers that span all ages and genders High-Quality, Versatile, Purpose-Driven Products 2 Mix of iconic classics and new pieces that resonate with customers Omni-Channel Stra
Slide 7: Our Values | What Guides Us
Our Values | What Guides Us Community Authenticity Integrity Freedom We are a place of inclusivity, diversity and open- While we draw inspiration from We always strive to do We celebrate the individuality of mindedness. the world around us, we never what’s right and to build style as a form of self-
Slide 8: Q4 Financial Highlights
Q4 Financial Highlights • Sales of $110.8M, compared to $108.2M last year o Excluding the $2.2M of sales generated during the additional fiscal week in Q4 2023, sales increased 4.5% o DTC sales were $101.2M, compared to $97.8M last year o DTC comparable sales growth was +7.5% • DTC gross margin impr
Slide 9: Brand & Customer Engagement
Brand & Customer Engagement • Executed on incremental marketing initiatives, focusing on elevating brand messaging and increasing customer engagement during our largest sales-generating quarter. • Our holiday campaign, Anything Roots, Everything Roots, reaffirmed Roots as the ultimate destination fo
Slide 10: Product Highlights
Product Highlights • Activewear achieved another quarter of robust double-digit growth, continuing to become a larger proportion of our sales and remains to be a future growth opportunity. • Our core fleece collections experienced strong year-over-year growth, as these important collections were hig
Slide 11: Operational Highlights
Operational Highlights • Successfully implemented AI tools focused towards our online channel, driving a more personalized shopping experience to improve customer engagement and sales conversion. • Advanced our data warehouse capabilities to strengthen our visibility to holistic customer insights an
Slide 12: Fourth-Quarter Sales
Fourth-Quarter Sales Total Sales DTC Sales P&O Sales $108.2M $110.8M $97.8M $101.2M $10.5M $9.6M Q4-2023 Q4-2024 Q4-2023 Q4-2024 Q4-2023 Q4-2024 • Excluding the $2.2M of sales from the extra • Excluding the $2.2M of sales from the extra • Decreased wholesale sales to our partner in fiscal week in Q4
Slide 13: Fourth-Quarter Gross Margin
Fourth-Quarter Gross Margin Total DTC 62.4% 61.3% 59.9% 58.6% Q4-2023 Q4-2024 Q4-2023 Q4-2024 • DTC product margin expansion (+) • Improved product costing and lower discounting (+) • Increased mix of royalties from licensing of the Roots brand (+) • Partially offset by unfavourable foreign exchange
Slide 14: Fourth-Quarter DTC Gross Margin Bridge
Fourth-Quarter DTC Gross Margin Bridge Improved product costing and lower discounting (30) bps 280 bps 62.4% 59.9% Q4-2023 Product Margin Unfavourable FX Q4-2024 Expansion 250 basis points increase in DTC gross margin PAGE 14
Slide 15: Fourth-Quarter SG&A Expenses
Fourth-Quarter SG&A Expenses Excluding the first two buckets, 2.3% increase in SG&A driven by increased marketing investments and sales driven variable costs $1.1M $0.7M $2.2M $45.2M $41.2M Q4-2023 Lower IFRS 16 Lease Unfavourable Revaluation Higher Marketing & Sales Q4-2024 Modification Gains of Ca
Slide 16: Fourth-Quarter Profitability
Fourth-Quarter Profitability Excluding the impairment, net income would have totaled $15.0 million, up 2.9% versus last year. $14.6M $0.4M ($36.7M) ($21.7M) Q4-2023 Non-Cash Impairment on Year-over-Year Improvement Q4-2024 Net Income Intangible Assets (Post Tax Impact) in Net Income Net Loss • In Q4
Slide 17: Fourth-Quarter Adjusted Profitability
Fourth-Quarter Adjusted Profitability Adjusted Net Income (1) Adjusted EBITDA(1) $16.0M $25.3M $23.2M $14.6M Q4-2023 Q4-2024 Q4-2023 Q4-2024 13.5% of sales 14.4% of sales 21.4% of sales 22.8% of sales (1) Adjusted Net Income and Adjusted EBITDA are non-IFRS measures. See "Appendix" at the end of thi
Slide 18: Balance Sheet & Cash Flow
Balance Sheet & Cash Flow Lowest Ever Net Debt(1) Levels $39.4M (9.3% YoY increase) $17.0M Continued Strong Free Cash Flow (1) Generation ~0.3x Leverage Ratio (1) $7.3M $41.0M (13.4% YoY increase) Q4-2023 Q4-2024 Healthy Inventory Position (1) Net Debt is a non-IFRS measure defined as long-term debt
Slide 19: Summary
Summary • Pleased with our fourth quarter results, achieving 7.5% DTC comparable sales growth; our highest growth since 2017. • Closing the year with a balance sheet position, ending net debt at $7.3M, a 56.7% reduction compared to 2023. • Inventory is in a healthy position, with good in-stock core
Slide 20: Looking Ahead
Looking Ahead • As we head into 2025, we remain committed to advancing our strategic initiatives. While mindful of the external market dynamics, we have limited sales exposure to the United States. • While early in the first quarter, Q4 momentum has continued, including low double-digit DTC comparab
Slide 21: Appendix
Appendix PAGE 21
Slide 22: Non-IFRS Measures and Industry Metrics
Non-IFRS Measures and Industry Metrics This presentation makes reference to certain non-IFRS measures including certain metrics specific to the industry in which we operate. These measures are not recognized measures under International Financial Reporting Standards as issued by the International Ac
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