Two Market Leaders: Just One’s a Buy

Article Excerpt

REITMANS (CANADA) LTD. $21.75 (Toronto symbol RET.A; SI Rating: Extra Risk) (514-384-1140; www.reitmans.com; Shares outstanding: 70.3 million; Market cap: $1.5 billion) is Canada’s largest specialty women’s wear retailer. It now has 919 stores in operation, consisting of 358 Reitmans, 164 Smart Set/Dalmys, 156 Penningtons, 39 RW & Co., 124 Addition Elle, 70 Thyme Maternity and 8 Cassis stores. All Reitmans stores are corporate owned. There are no franchise outlets. Reitmans continues to steadily increase its sales. Over the last five years, sales have grown at an annual rate of 11.4%, to $969.3 million from $566 million. In the three months ended October 28, 2006, Reitmans’ revenues rose 8.4%, to $258.6 million from $238.6 million. Earnings rose 21.6%, to $23.4 million or $0.33 a share, from $19.2 million or $0.28 a share. Cash flow rose 14%, to $35 million or $0.49 a share, from $30.7 million or $0.45. The company continues to use its strong cash flow to upgrade and renovate stores. It has…

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