Topic: How To Invest

Stock Pickers Digest Hotline – Friday, June 7, 2019

Article Excerpt

REITMANS (CANADA) LTD., $2.10, symbol RET.A on Toronto, owns 594 women’s clothing stores across Canada. Those outlets are divided among several brands: Reitmans (259 stores), Penningtons (115), Addition Elle (80), RW & Co. (82) and Thyme Maternity (58). In the three months ended May 4, 2019, sales fell 10.8%, to $185.2 million from $207.6 million a year earlier. Revenue decreased mostly because of the net closure of 43 stores over the last year. As well, unseasonable weather conditions reduced store traffic. Same-store sales fell 5.7%. The retailer lost $12.6 million, or $0.20 a share. That’s up from a year-earlier loss of $3.2 million, or $0.05 a share. Reitmans’ balance sheet remains strong: the company holds cash and securities of $122.3 million, or $1.93 a share; and it has no long-term debt. The stock yields a high 9.5%, and while that dividend appears sustainable, there are no guarantees if Reitmans continues to lose money. The company’s willingness to close unprofitable stores should support its long-term success…

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