Indigo Books and Music, Canada's leading book retailer, reported a drop in revenue for its third quarter, which ended December 26. The company had strong sales early in the quarter, but revenue was hit when the government mandated pandemic-related store closures through the later half of November and December. Revenue was C$365.4 million, down 5% from the same period last year.
E-commerce sales continued to boom as they had all year and the channel saw revenue growth of 92% for the quarter, bolstered by curbside pick up and same-day local delivery programs, such as Instacart. Online sales hit C$125.5 million in the quarter, and accounted for 34% of Indigo's third quarter sales, up from 17% a year ago. Sales at superstores fell 26%, to $C196.1 million, and sales at Indigo's small format stores fell 30%, to C$34.3 million. The company said due to lockdown-imposed closures it did not believe releasing same store sales figures--usually an important barometer of how a retailer is doing-was relevant.
Adjusted EBITDA for the period was C$37.8 million down from C$43.3 million for the same quarter last year. The company did benefit from C$9.7 million in rent and lease abatement and $3.2 million in government support from the Canada Emergency Wage Subsidy program.
“These results are a testament to the demonstrated resilience of our teams and a deep affinity for our brand, achieved against massive disruption from mandated shut-downs and store limitations during the most important six weeks of our year," said CEO Heather Reisman. "These shutdowns created a particularly uneven playing field in Ontario with ‘essential’ retailers selling all non-essential items, a practice disallowed by other provinces. Nevertheless, we remain energized by the momentum we saw pre-closures and look forward to having Covid-19 behind us.”
The company said it had no outstanding debt and cash reserves of $229.4 million, and thus, "continues to be well positioned to manage through these uncertain times."
