Net loss for the year totalled $49.6 million ( $1.78 net loss per basic common share) compared to net earnings of $3.3 million ( $0.12 net earnings per basic common share) in the prior year.įourth quarter results were heavily impacted by the ransomware attack, driving a decrease in revenue of $26.5 million to $194.2 million for the quarter ended April 1, 2023, compared to revenue of $220.7 million in the prior year. While the business interruption losses cannot be reasonable estimated at this time, the Company incurred $5.2 million of expenses as of Apwhich impacted the net loss position. Indigo maintains cyber insurance coverage and is in the process of working with its insurer to make claims under the policy. The Company was challenged by higher shrink levels, which is consistent with industry trends, and incurred additional costs associated with the modernization of its ecommerce platforms. Adjusted EBITDA was further impacted by the macro-economic environment which drove increased cost of inventories and an incremental $5.5 million of international freight, amongst other inflationary pressures. The ransomware attack caused an interruption to the Company's sales operations, the ultimate financial impact of which cannot be reasonably estimated at this time, however, the impact was material to fiscal 2023 sales, Adjusted EBITDA and net loss position. We are looking forward to injecting momentum back into the business in fiscal 2024 with the exciting launch of a new digital platform in the late Summer and our new flagship store at the Well, Toronto in September."Īdjusted EBITDA for the year was a loss of $20.5 million, compared to earnings of $32.5 million in the prior year. Through all of this, Indigo customers continued to show their loyalty to our brand, and we are proud to have achieved merchandise sales growth. I am incredibly thankful for our incredible teams, who have been working tirelessly to bring operations back to normal. These headwinds were furthered by the ransomware attack in our fourth quarter. The print business declined by 3.7%, negatively impacted by system limitations from the ransomware attack which adversely affected the Company's ability to replenish its inventory levels.Ĭommenting on results, CEO Peter Ruis said: "This has been a turbulent year for Indigo, as the progress gained from our post-pandemic re-emergence was negatively impacted by adverse macro-economic factors. The general merchandise business increased 5.8% in the current year, with double-digit growth in the paper, baby and wellness product categories. However, the Company's ecommerce platforms sustained year-to-date sales growth of 71%, through January, compared to pre-pandemic fiscal 2020, demonstrating their importance as a lever of expansion and investment for the Company. 1 Strong retail performance resulted in a shift in the sales channel mix, which coupled with the ransomware attack led to a year-over-year decline in online sales performance. Customers' desire to shop in-store fuelled a rebounding retail channel, which in the Company's second quarter drove sales above pre-pandemic levels and in the third quarter delivered a record-breaking Boxing week. Merchandise sales growth was achieved despite the ransomware attack, which compounded the headwinds of an already challenging macro-economic environment. Merchandise sales, the total of retail and online sales and excluding other revenues, grew $4.6 million or 0.5% to $1.015 billion, compared to $1.010 billion in the prior year. Prior year revenue was inclusive of a one-time payment of $17.0 million, resulting from the renegotiation of the Company's partnership with one of its café vendors. Revenue for the year totaled $1.058 billion, compared to $1.062 billion in the prior year, a decrease of $4.6 million or 0.4%. The retail network was unable to process electronic payments for approximately three days and experienced other operational limitations that impacted the Company's ability to fulfil demand. The Company's ecommerce platforms were temporarily shut down, with the full website being restored after four weeks. This had a material impact on sales and profitability in the fourth quarter and fiscal year, as further discussed below. On February 8, 2023, the Company was the victim of a ransomware attack, resulting in internal operational disruptions and service disruptions to both sales channels. Indigo Books & Music logo (CNW Group/Indigo Books & Music Inc.)
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