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Root Q4 2024 Earnings Report
Roots reported a decrease in sales but an increase in net income for the fourth quarter of fiscal year 2023.
Key Takeaways
Roots experienced a slight decrease in total sales for Q4 2023, down 2.9% year-over-year, but saw an increase in net income by 12.6%. Gross margin improved significantly, rising to 58.6%.
Total sales decreased by 2.9% year-over-year to $108.2 million.
Net income increased by 12.6% to $14.6 million.
Gross margin improved to 58.6% from 56.5% in Q4 2022.
Adjusted EBITDA slightly decreased by 1.5% to $23.2 million.
Root
Root
Root Revenue by Segment
Revenue by Segment
Direct-to-Consumer Revenue
CapyFin.comPartners & Other Revenue
CapyFin.com Forward Guidance
The company did not provide specific forward-looking financial guidance for the upcoming fiscal year in this report. However, the CEO expressed confidence in longer-term growth prospects as the market normalizes.
Positive Outlook
- Confidence in longer-term growth prospects as the market normalizes.
- Reduced inventory balance by 34% year-over-year.
- Strengthened cash flow leading to a 32% reduction in net debt.
- Robust balance sheet provides flexibility to strategically purchase inventory.
- Improved product costing and lower freight costs contributing to margin expansion.
Challenges Ahead
- Navigating through short-term macroeconomic headwinds.
- Declines in conversion offsetting positive omni-channel traffic.
- Declines in certain seasonal collections, including colder weather outerwear and accessories.
- Impact of higher mix of sales during discount periods on gross margin.
- Unfavourable foreign exchange impact on U.S. dollar purchases.
Revenue & Expenses
Visualization of income flow from segment revenue to net income