MONTREAL - Clothing retailer Reitmans says a tough economy is leaving consumers with less disposable income for clothes, creating a retail climate that is pulling down its sales revenue and profit.
The Montreal-based company is reporting second-quarter net earnings of $27.7 million, or 42 cents per diluted share, down from $31.7 million, or 48 cents per diluted share, in the same period last year.
Sales revenue for the quarter ended July 28 was down 2.3 per cent to $279.5 million compared to $286 million year over year.
Reitmans (TSX:RET.TO - News) says high fuel and food prices and increased levels of consumer personal debt mean less money for clothes — and it's hurting their bottom line.
Quarterly same-store sales, a key metric in the retail world, fell 1.7 per cent.
Reitmans has stores in Canada, under the Reitmans, Smart Set, RW & CO., Thyme Maternity, Penningtons and Addition Elle banners.
During the second quarter, the company opened 11 new stores, but closed 18. As of July 28 it had 918 stores in operation, down from 965 in the year-earlier quarter.
Reitmans warned earlier this month that its sales for August have been hurt by problems with a new warehouse management system at its distribution centre.
The retailer said it believes the situation has been fixed, but the disruptions in the shipping and receiving of merchandise to stores would hurt sales and margins for the third quarter.
Shares in the company, which reported its results after markets closed, added three cents to $12.70 on the Toronto Stock Exchange.
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