Reitmans Canada Ltd Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Edward O'Flynn - Parma Investments - Analyst : Hi, Andrea. Hi, Caroline. Congratulations on your promotion and good luck with it all. Andrea Limbardi - Reitmans Canada Ltd Hi, Eddie. Good to hear your voice.

Question: Edward O'Flynn - Parma Investments - Analyst : So Andrea, well done to you and the team on a solid quarter. It's great to see gross margins expanding again and top line is very solid. So changes you're making are having an impact. So well done, that's great. We'd probably like to see some of the costs come out of SG&A. But in general, operationally, you're doing a great job, you and your team. And really looking forward to seeing you guys building on that over the coming quarters. So well done. And while not wanting to detract from the company's operational performance, I suppose you're aware that ourselves and other shareholders are not satisfied with how the company has been chaperoned at the Board and chair level. So we have a collective group of shareholders now making up almost 20% of the share register, and we all share common concerns and as you know, the concerns that I've raised as Parma Investments is probably the second biggest shareholder in the company is that continued minority shareholder oppression and the Board lacking independence and not actually acting in the best interest of all of the shareholders collectively, which include employees who are also incentivized by stock and the share price. And we're working really hard to do a great job. The continued refusal to [ uplift ] and lack of any clear reason as to why that's not taking place, can only lead us to the assumption that the reasoning behind it could be cynical. So the shares are -- including leases trading at a negative enterprise value. And the token small buyback at the moment is menial when the IRR is close to 100% on buybacks. You look at Groupe Dynamite's forward EBITDA, and it's 11 times Reitmans with a similar top line, whilst different companies on a margin profile basis is a negative enterprise value. So a lot of the gap in terms of valuation is down to the poor governance and decision-making at Board and share level at Reitmans. So I'd like to call out any other shareholders to contact me and join the collective group who have concerns around governance and the decisions that the Board and the Chair have made and selectively try and encourage the Board and the chair to do what's right by all shareholders and not just the one shareholder and satisfy what they want to do.

Question: Edward O'Flynn - Parma Investments - Analyst : Yes.

Question: Edward O'Flynn - Parma Investments - Analyst : Okay. So in terms of the capital expenditure going forward, what kind of a return on investment capital hurdle -- have you satisfied internally Andrea or Caroline for these investments? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 20, 2024 / 1:30PM, RETa.V - Q3 2025 Reitmans Canada Ltd Earnings Call Andrea Limbardi - Reitmans Canada Ltd Thanks, Eddie. And first, I appreciate your acknowledgment of the good work being done by the team. We're on a long-term journey here to drive growth for the organization. We're going to continue to stay on it. We're laser-focused on it and see, as you know, strong upside as we continue to make good decisions for the growth and long-term growth of the organization as we move from -- into our 99th year with the vision of another 99-plus years forward. So thank you for that. I acknowledge your comments as well from a minority shareholder perspective and well received. In terms of capital investment, we're really quite conservative on our return on capital. We ensure that our projects all hurdle in a relatively short time frame. We are looking at potentially sharing that metric more directly in the coming years. So more to come on that. But so far, very conservative metrics with quite near-term profitability requirements.