GROUPE DYNAMITE REPORTS FIRST QUARTER FISCAL 2025 RESULTS, MARKING 10 CONSECUTIVE QUARTERS OF POSITIVE COMPARABLE STORE SALES GROWTH

13.0% comparable store sales growth in Q1 2025, over and above 16.4% in Q1 2024

Guidance raised to a range of 7.5% to 9.0% on comparable store sales growth for Fiscal 2025

Market-leading inventory turnover of 8.5x, driven by our remarkable agility

Reduction by more than 50% of China receipts into the U.S. in response to tariffs

Share buyback program initiated and expanded with the adoption of an automatic share purchase plan

MONTRÉAL, June 17, 2025 /CNW/ - Groupe Dynamite Inc. ("Groupe Dynamite" or the "Company") (TSX:GRGD) today reported its financial results for the fiscal year 2025's first quarter ended May 3, 2025.

"We're marking a milestone quarter in every sense. As we celebrate Garage's 50th anniversary, we're also celebrating performance that speaks for itself: 13.0% comparable store sales growth on top of last year's 16.4%, and strong momentum carrying into Q2, with comps trending even higher. Our luxury-inspired business model continues to deliver, driven by agility, emotional connection, and a culture that shows up every day with purpose. With the launch of our inaugural ESG report and our Shared Success Program, we remain focused on building lasting value for our customers, our people, and our shareholders," said Andrew Lutfy, Chief Executive Officer and Chair of the Board.

"This quarter, we saw what's possible when product, marketing, and the field are fully aligned. Our collections were supported by strong storytelling across every channel—and brought to life by a community that believes in the brand, from store teams to influencers to loyal customers. With strong execution and momentum across the business, and the launch of our U.S. distribution center next quarter, we're set to deliver even faster, sharper, and more connected brand experiences," added Stacie Beaver, President & Chief Operating Officer. 

Fiscal 2025 First Quarter Highlights

Revenue increased by 20.0% to $226.7 million in Q1 2025, compared to $188.9 million in Q1 2024.

Comparable store sales growth(1) of 13.0% in Q1 2025, over and above comparable store sales growth of 16.4% in Q1 2024.

Retail sales per square foot(1) increased by 16.0% compared to Q1 2024, reaching $756 in Q1 2025.

SG&A increased to $74.7 million in Q1 2025, compared to $66.2 million in Q1 2024, and adjusted SG&A as a percentage of sales(1) decreased to 32.4% from 34.6% over the same period in Fiscal 2024.

Operating income increased by 16.2% to $44.3 million in Q1 2025, compared to $38.2 million in Q1 2024.

Adjusted EBITDA(1) increased by 19.8% to $66.8 million in Q1 2025, representing an adjusted EBITDA margin(1) of 29.5%, unchanged from the same period in Fiscal 2024.

Diluted net earnings per share increased to $0.24 in Q1 2025, compared to $0.22 in Q1 2024 and adjusted diluted net earnings per share (1) increased by 8.7% to $0.25 in Q1 2025, compared to $0.23 in Q1 2024.

Real estate activity for Q1 2025 includes:

Opening of 1 gross new store in the United States under the Garage banner

Closure of 2 stores: 1 in the United States under the Dynamite banner and 1 in Canada also under the Dynamite banner

Relocation of 3 stores: 1 in the United States under the Garage banner and 2 in Canada also under the Garage banner.

Ratios and Recent Developments

Inventory turnover (1) improved to 8.50x in Q1 2025, compared to 7.59x in Q1 2024.

Net leverage ratio (1) was 0.92x in Q1 2025, down from 1.79x in Q1 2024.

Return on assets ("ROA") (1) improved to 23.8% in Q1 2025, compared to 20.0% in Q1 2024.

Return on capital employed ("ROCE") (1) reached 44.5% in Q1 2025, compared to 37.4% in Q1 2024.

During the quarter, the Company repurchased 168,900 shares at an average price of $13.74 for a total of approximately $2.3 million. As of June 13, a total of 393,600 shares have been repurchased since the inception of the normal course issuer bid.

_________

Notes:

(1)

Refer to "Non-IFRS Measures including Non-IFRS Financial Measures, Non-IFRS Ratios, Supplementary Financial Measures and Retail Industry Metrics" section of this press release for further details concerning these measures including definitions and reconciliations of each non-IFRS financial measure to the relevant reported IFRS financial measure. Non-IFRS financial measures and non-IFRS ratios do not have a standardized meaning under IFRSÒ Accounting Standards, as issued by the International Accounting Standards Board (IASB) ("IFRS Accounting Standards") which are used to prepare the Company's financial statements and might not be comparable to similar financial measures presented by other entities.

(2)

All references to "Q1 2025" are to the Company's 13-week period ended May 3, 2025; to "Q1 2024" are to the Company's 13-week period ended May 4, 2024; to "Fiscal 2024" are to the Company's fiscal year ended February 1, 2025; to "Fiscal 2025" are to the Company's fiscal year ending January 31, 2026.

Outlook 

The table below outlines the Company's revised financial annual guidance ranges for Fiscal 2025 replacing our previously disclosed guidance:

Revised Fiscal 2025 Guidance

Original Fiscal 2025 Guidance

Real estate activity

 

18 to 20 gross new store openings

9 to 10 net new store openings

18 to 20 gross new store openings

9 to 10 net new store openings

Comparable store sales growth

↑ 7.5% to 9.0%

5.0% to 6.5%

Adjusted EBITDA margin

30.3% to 32.3%

30.3% to 32.3%

CAPEX

$95.0 to $105.0 million

$95.0 to $105.0 million

Our achievement of these targets is subject to several risks and uncertainties, including the following:(1)

Adverse effects from future policy or legislative changes, tariffs (in addition to those currently in place) that may be imposed by the United States, or retaliatory tariffs from other countries and the United States.

 Failing to successfully locate our stores in suitable locations and any impairment of a store location, including any decrease in customer traffic.

Failing to negotiate lease agreements for the store pipeline for Fiscal 2025, along with the risk of delays in construction activities beyond our control, and substantial increases in occupancy costs.

Failing to complete the renovations and relocations scheduled for Fiscal 2025, which is expected to be between approximately 10 to 15, including 3 DYN 3.0 store concepts in Canada.

Headwinds of $4 to $5 million in incremental public company costs, or a 40-basis point impact on adjusted EBITDA margin, which is included in the outlook table above.

Maintaining recent levels of comparable store sales or retail sales per square foot.

Disruption of our strategic relationships with suppliers, impairing open-to-buy visibility.

Failing to optimize merchandise and anticipate and respond to constantly changing consumer demands and fashion trends.

Failing to protect and enhance our brands.

Failing to attract new customers, or retain existing customers, or to maintain or increase sales to those customers.

Failing to actively manage product margins, including the implementation of effective pricing strategies.

Obstacles to the ongoing implementation of in-store productivity initiatives and the achievement of cost savings intended to improve operating expenses.

Any material disruption in our information technology systems and e-commerce business.

The occurrence of unusually adverse weather, particularly during peak seasons.

Adverse changes in the general economic conditions and consumer spending in Canada, the United States and other parts of the world.

___________

Note:

(1)

The guidance ranges included in this section are forward-looking statements within the meaning of applicable securities laws, are based on assumptions that we believe to be reasonable, are subject to several risks and uncertainties, and should be read in conjunction with the "Forward-Looking Statements" section of this press release, which outlines such assumptions and describes certain of such risks.

First Quarter Fiscal 2025 Financial Results

Revenue

Total revenue for Q1 2025 increased by $37.8 million or 20.0% compared to Q1 2024. This growth was primarily due to a 13.0% increase in comparable store sales and contributions from new stores. Penetration of online revenue for the quarter has therefore increased by 0.1% from 16.3% in Q1 2024 to 16.4% in Q1 2025.

Cost of sales and gross profit

Gross profit for Q1 2025 increased by $20.1 million or 16.6% compared to Q1 2024, with gross margin(1) declining by 180 basis points to 62.1%, reflecting the impact of additional tariffs, partly offset by our mitigation efforts.

SG&A and Adjusted SG&A as a percentage of sales

SG&A for Q1 2025 increased by $8.5 million or 12.8% compared to Q1 2024. This increase was primarily driven by the Company's growing scale and activities, leading to a $3.3 million increase in wages, salaries, and employee benefits. Additionally, during Q1 2025, the Company strategically increased its marketing investment by launching more initiatives aimed at driving brand awareness, resulting in a $3.1 million increase in selling and marketing expenses compared to Q1 2024. Administrative costs increased by $2.1 million, negatively impacted by $0.5 million of professional fees related to the IPO. Adjusted SG&A as a percentage of sales improved to 32.4% in Q1 2025 down from 34.6% in Q1 2024.

Net earnings and adjusted net earnings

Net earnings for Q1 2025 increased by $3.4 million or 14.2% compared to Q1 2024. This growth is mainly attributed to higher revenue, partially offset by higher net financing costs and increased depreciation and amortization. Adjusted net earnings(1) for Q1 2025 increased by $3.6 million or 14.5% compared to Q1 2024.

Operating income and adjusted EBITDA

Operating income for Q1 2025 increased by $6.2 million or 16.2% to reach $44.3 million in Q1 2025 compared to $38.2 million in Q1 2024. Similarly, adjusted EBITDA for Q1 2025 increased by $11.1 million or 19.8% to reach $66.8 million compared to $55.8 million in Q1 2024. The adjusted EBITDA margin remained stable at 29.5% in Q1 2025, compared to the same period last year despite a decrease in gross margin. This reflects the benefits of operating leverage and effective cost management in a dynamic and challenging environment.

Working capital

As of May 3, 2025, we have maintained a strong inventory turnover ratio of 8.50x, compared to 7.59x as of May 4, 2024, with current assets of $198.8 million (including $106.6 million in cash) and current liabilities of $184.8 million. Inventory continues to be minimized through agile product development and strategic sourcing, driven by our high open-to-buy ratio.

Free cash flow

The Company reported robust free cash flow(1), achieving $41.6 million in Q1 2025, up from $36.6 million in Q1 2024, reflecting stronger cash generation despite a $10.8 million increase in CAPEX to $21.1 million.

Net leverage ratio

The Company's net leverage ratio decreased to 0.92x compared to 1.79x last year. This improvement is due to the increase in adjusted EBITDA, coupled with the repayment of all of its outstanding borrowings under the credit facilities which has more than offset the increase in lease liabilities and allowed the Company to reduce leverage significantly. At the end of Q1 2025, the Company has over $106.6 million in cash and $312 million available under credit facilities, providing flexibility to drive growth, invest in strategic initiatives and manage market volatility.

Return metrics

ROA of 23.8% for Q1 2025 has increased from the ROA of 20.0% for Q1 2024. This improvement indicates a significant boost in the Company's ability to leverage its assets more effectively than in previous periods.

For Q1 2025, our ROCE reached 44.5%, compared to 37.4% in Q1 2024, highlighting the effectiveness of our recent strategies and investments.

_______________

Note:

(1)

Refer to "Non-IFRS Measures including Non-IFRS Financial Measures, Non-IFRS Ratios, Supplementary Financial Measures and Retail Industry Metrics" section of this press release for further details concerning these measures including definitions and reconciliations of each non-IFRS financial measure to the relevant reported IFRS financial measure. Non-IFRS financial measures and non-IFRS ratios do not have a standardized meaning under IFRS Accounting Standards, which are used to prepare the Company's financial statements and might not be comparable to similar financial measures presented by other entities.

Selected Financial Information

13-week periods ended

In thousands of Canadian dollars, except per share data and retail sales per