Le Château Inc. Reports Unaudited Consolidated Earnings Results for the Fourth Quarter and Full Year Ended January 27, 2018; Reports Write-Off and Impairment of Property and Equipment and Intangible Assets for the Fourth Quarter Ended January 27, 2018; Provides Capital Expenditures Guidance for the Full Year of 2018
For the full year, the company reported sales amounted to CAD 204.4 million as compared with CAD 226.6 million last year, a decrease of 9.8%, with 27 fewer stores in operation. Comparable store sales decreased 2.6% versus the same period a year ago, with comparable regular store sales decreasing 1.4% and comparable outlet store sales decreasing 7.7%. Included in comparable store sales are online sales which increased 20.3% for the year ended January 27, 2018. Adjusted LBITDA amounted to CAD 5.4 million, compared to CAD 16.3 million last year. The improvement of CAD 10.9 million in adjusted EBITDA for 2017 was primarily attributable to the reduction of CAD 19.5 million in SG&A expenses, partially offset by the decrease in gross margin dollars of CAD 8.6 million. Loss from operating activities was CAD 16.977 million against CAD 32.134 million a year ago. Loss before income taxes was CAD 23.973 million against CAD 37.226 million a year ago. Cash used in operating activities was CAD 2.471 million against CAD 7.428 million a year ago. Additions to property and equipment and intangible assets were CAD 1.807 million against CAD 4.516 million a year ago. Net loss amounted to CAD 24.0 million or CAD 0.80 per share compared to CAD 37.2 million or CAD 1.24 per share the previous year.
For the quarter, the company reported write-off and impairment of property and equipment and intangible assets of CAD 382,000 against CAD 913,000 a year ago.
For 2018, the projected capital expenditures are CAD 3.0 million to CAD 3.5 million, of which CAD 1.8 million is expected to be invested in the renovation of two existing stores, with CAD 1.2 million to CAD 1.7 million to be used for investments in information technology and infrastructure. During the store closure process, the planned increase in promotional activities had a significant impact on store contribution as merchandise from those stores were heavily discounted, thus reducing margins. Despite the impact of store closures, the gross margin improved by 250 basis point to 64.4% for the year ended January 27, 2018. For the current fiscal year, considering the significant decline in the number of non-performing stores in the network and the improved inventory level and quality, the company's gross margin should see further improvement.