GROUPE DYNAMITE REPORTS FOURTH QUARTER AND FISCAL 2024 RESULTS AND INTRODUCES SHARE BUYBACK PROGRAM

Q4 marked strong continued growth, with revenue and margins both exceeding expectations

Fiscal 2024 sets a strong foundation for growth into fiscal 2025

Return of capital to shareholders via implementation of a share buyback program

Market-leading operational and financial metrics reflecting our luxury-inspired operating model

MONTREAL, April 15, 2025 /CNW/ - Groupe Dynamite Inc. ("Groupe Dynamite" or the "Company") (TSX:GRGD) today reported its financial results for the fourth quarter and full year of fiscal 2024 ended February 1, 2025.

"Fiscal 2024 was a breakthrough year for Groupe Dynamite—one that reaffirmed the power of our brands and our vision. Our strong financial and operational results are the outcome of relentless focus, a responsive supply chain, and deep cultural relevance. Garage and Dynamite aren't just brands—they're platforms for confidence, creativity, and connection. As we look ahead, we acknowledge the current market uncertainty and we remain focused on staying agile, embracing change, and seizing opportunities in a rapidly evolving environment," said Andrew Lutfy, Chief Executive Officer and Chair of the Board.

"Our Fiscal 2024 performance reflects the strength of our brands and the focus of our teams. We delivered on-trend collections that resonated strongly, and we activated cultural moments that sparked real engagement. From our high-impact real estate strategy to our upcoming U.S. distribution center launch, we're continuing to build an agile, omnichannel platform designed for scale. As we head into Fiscal 2025, our growth is anchored in a clear brand flywheel: we create brand moments that drive visibility, empower ambassadors to expand reach, and reward loyal customers who fuel our momentum. This is how we win—by staying close to her world and delivering an experience that is emotionally resonant, community-driven, and impossible to ignore," added Stacie Beaver, President & Chief Operating Officer. 

"Our top priority remains reinvesting in the business to drive long-term growth, as reflected in our FY25 capital expenditure guidance, which is primarily focused on opening new stores in high-quality real estate. In these volatile times, we are opportunistic in taking market share and securing new premier locations to strengthen our real estate portfolio. Given our strong balance sheet and robust free cash flow generation, along with the belief that the market price of the subordinate voting shares may from time to time not reflect the underlying value of the subordinate shares, we believe a Normal Course Issuer Bid provides an opportunistic way to return capital to shareholders. In this context, we see value in repurchasing shares when appropriate, while maintaining a disciplined capital structure. We believe that introducing an NCIB demonstrates our confidence in the company's fundamentals and our commitment to delivering long-term shareholder value," said Jean-Philippe D. Lachance, Chief Financial Officer.

The results for Q4 2024 and Fiscal 2024 reflect one fewer week compared to the results for Q4 2023 and Fiscal 2023. All comparable store data for both the quarter and the year are presented on a comparable basis of 13 and 52 weeks, respectively.

Fiscal 2024 Fourth Quarter Highlights

Revenue increased by 13.1% to $271.8 million in Q4 2024, compared to $240.3 million in Q4 2023. Excluding the 14th week of Q4 2023, total revenue increased by 18.8%.

Comparable store sales growth(1) of 9.5% in Q4 2024, over and above comparable store sales growth of 9.8% in Q4 2023.

Gross margin slightly expanded by 0.1% to 59.0% in Q4 2024 compared to 58.9% in Q4 2023.

SG&A increased to $87.0 million in Q4 2024, compared to $74.4 million in Q4 2023, and adjusted SG&A as a percentage of sales decreased to 29.6% from 30.5% over the same period in Fiscal 2023.

Operating income increased by 4.6% to $50.7 million in Q4 2024, compared to $48.5 million in Q4 2023.

Adjusted EBITDA(1) increased by 17.0% to $79.5 million in Q4 2024, representing an adjusted EBITDA margin(1) of 29.2%, compared to 28.3% over the same period in Fiscal 2023.

Diluted net earnings per share increased to $0.28 in Q4 2024, compared to $0.27 in Q4 2023 and adjusted diluted net earnings per share(1) increased by 18.3% to $0.33 in Q4 2024, compared to $0.28 in Q4 2023.

Real estate activity for Q4 2024 includes:

Opening of 2 gross new stores in the United States under the Garage banner

Closure of 3 stores: 1 in the United States under the Dynamite banner and 2 in Canada under the Garage banner

Completion of 1 store relocation in the United States under the Garage banner

Fiscal 2024 Highlights

Revenue increased by 19.7% to $958.5 million in Fiscal 2024, compared to $800.8 million in Fiscal 2023. Excluding the 53rd week of Fiscal 2023, total revenue increased by 21.4%.

Comparable store sales growth(1) of 12.3% in Fiscal 2024, over and above comparable store sales growth of 8.2% in Fiscal 2023.

Retail sales per square foot(1) increased by 18.6% since the end of Fiscal 2023, reaching $734 in Fiscal 2024.

Gross margin expanded by 2.0% to 62.8% in Fiscal 2024 compared to 60.8% in Fiscal 2023.

SG&A increased to $313.2 million in Fiscal 2024, compared to $272.3 million in Fiscal 2023 and adjusted SG&A as a percentage of sales decreased to 31.2% from 33.7% in Fiscal 2023.

Operating income increased by 46.2% to $212.2 million in Fiscal 2024, compared to $145.2 million in Fiscal 2023.

Adjusted EBITDA(1) increased by 39.5% to $303.3 million in Fiscal 2024, representing an adjusted EBITDA margin(1) of 31.6%, compared to 27.1% over last year, driven by higher gross margin and operating leverage.

Diluted net earnings per share increased to $1.25 in Fiscal 2024, compared to $0.80 in Fiscal 2023, and adjusted diluted net earnings per share(1) increased by 64.9% to $1.36 in Fiscal 2024, compared to $0.82 in Fiscal 2023.

Real estate activity for Fiscal 2024 includes:

Opening of 20 gross new stores: 17 in the United States under the Garage banner and 3 in Canada under both banners

Closure of 12 stores: 2 in the United States under both banners and 10 in Canada under both banners

Completed the relocation and renovation of 4 stores in the United States under the Garage banner

Ratios and Recent Developments

As a result of our luxury-inspired operating model, our inventory turnover(1) improved to 8.54x in Fiscal 2024, compared to 7.98x in Fiscal 2023.

Net leverage ratio(1) was 0.98x in Fiscal 2024, down from 1.96x in Fiscal 2023.

Return on assets ("ROA")(1) improved to 26.0% in Fiscal 2024, compared to 17.9% in Fiscal 2023.

Return on capital employed ("ROCE")(1) reached 47.4% for Fiscal 2024, compared to 35.3% in Fiscal 2023.

In February 2025, the Company entered into a warehousing agreement with a third-party logistics provider to deliver warehousing and distribution services in the United States, with minimal CAPEX(1) involved. The distribution center is slated to go live in summer 2025.

The Company announced today that it approved a normal course issuer bid ("NCIB") program, allowing the Company to repurchase up to an aggregate 1,301,447 subordinate voting shares. Further details are provided in a later section of this press release.

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 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 "Q4 2024" are to the Company's 13-week period ended February 1, 2025; to "Q4 2023" are to the Company's 14-week period ended February 3, 2024; "Fiscal 2024" are to the Company's fiscal year ended February 1, 2025; and "Fiscal 2023" are to the Company's fiscal year ended February 3, 2024.

Outlook

The table below outlines the Company's financial annual guidance ranges for Fiscal 2025:(1)

Fiscal 2025 Guidance

Real estate activity

 

18 to 20 gross new store openings

9 to 10 net new store openings

Comparable store sales growth

5.0% to 6.5%

Adjusted EBITDA margin

30.3% to 32.3%

CAPEX

$95.0 to $105.0 million

Our achievement of these targets is subject to several risks and uncertainties, including the following:(2)

Adverse effects from future policy or legislative changes, tariffs (in addition to those announced in April 2025) 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 10 to 15 stores, 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.

Notes:

(1)

"Fiscal 2025" are to the Company's fiscal year ended January 31, 2026

(2)

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.

Normal Couse Issuer Bid

The Company's capital allocation priority for the next 12 months is investing in business growth. With a healthy balance sheet and minimal debt, we expect to continue generating strong free cash flow. We plan to return capital to shareholders in the near term through our NCIB (defined below) while maintaining a solid balance sheet. With the belief  that the market price of the subordinate voting shares may from time to time not reflect the underlying value of the subordinate voting shares, Groupe Dynamite announced today that its board of directors has approved, and that it received approval from the TSX for, the implementation of a normal course issuer bid ("NCIB"), authorizing the Company to repurchase up to an aggregate of 1,301,447 subordinate voting shares, representing approximately 10% of the public float as at April 3, 2025.

The net average daily trading volume for the period since the date of listing, November 26, 2024, up to April 10, 2025, represents 76,939 subordinate voting shares. In accordance with TSX requirements, the Company is entitled to purchase, on any trading day, up to a total of 19,234 subordinate voting shares representing 25% of this average daily trading volume. The Company may repurchase subordinate voting shares on the open market through the facilities of the TSX as well as through other alternative Canadian trading systems, from time to time, over the course of twelve months commencing on or around April 17, 2025 and ending at the latest on April 16, 2026.

The actual number of subordinate voting shares purchased under the NCIB, the timing of purchases and the price at which the subordinate voting shares are bought will depend upon management discretion based on factors such as market conditions. All subordinate voting shares repurchased under the NCIB will be cancelled upon their repurchase.

In connection with the NCIB, the Company will enter into an automatic securities purchase plan ("ASPP") with a designated broker on or about April 21, 2025 whereby shares may be repurchased at times when such purchases would otherwise be prohibited pursuant to regulatory restrictions or self-imposed blackout periods. Under the ASPP, before entering a self-imposed blackout period, the Company may, but is not required to, ask the designated broker to make purchases under the NCIB. Such purchases will be made at the discretion of the designated broker, within parameters established by the Company prior to the blackout periods. Outside the blackout periods, purchases are made at the discretion of the Company's management. The ASPP will constitute an "automatic plan" for purposes of applicable Canadian securities legislation and has been pre-cleared by the TSX.

As of April 3, 2025, the Company had 15,405,043 subordinate voting shares issued and outstanding, and a public float of 13,014,479 subordinate voting shares. The Company has not repurchased any of its subordinate voting shares during the last twelve months.

Fourth Quarter and Fiscal 2024 Financial Results

Revenue

Total revenue for Q4 2024 increased by $31.5 million or 13.1% compared to Q4 2023. Excluding the 14th week of Q4 2023, total revenue increased by 18.8%. This growth was primarily due to a 9.5% increase in comparable store sales and contributions from new stores. Online revenue for Q4 2024 increased by $7.4 million or 13.6% compared to Q4 2023, reaching $61.6 million for the quarter.

Total revenue for Fiscal 2024 increased by $157.7 million or 19.7% compared to Fiscal 2023. Excluding the 53rd  week of Fiscal 2023, total revenue increased by 21.4%. This growth was primarily due to a 12.3% increase in comparable store sales and contribution from new stores. Online revenue for Fiscal 2024 increased by $24.7 million or 16.8% compared to Fiscal 2023, reaching $171.8 million for the year.

Cost of sales and gross profit

Gross profit for Q4 2024 increased by $18.8 million or 13.3% compared to Q4 2023, which resulted in gross margin expanding by 0.1% to 59.0% from 58.9% over the same period in Fiscal 2023. This improvement is primarily due to lower occupancy costs as a percentage of sales.

Gross profit for Fiscal 2024 increased by $114.4 million or 23.5% compared to Fiscal 2023, which resulted in gross margin expanding by 2.0% to 62.8% from 60.8% over last year. This increase is attributable to the 19.7% revenue growth compared to the relatively lower increase in cost of sales of 13.8% which is due to controlled merchandise cost increases, lower outbound freight costs and lower markdowns.

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

SG&A for Q4 2024 increased by $12.7 million or 17.0% compared to Q4 2023. This increase was primarily driven by the company's growing scale and activities, leading to a $5.2 million increase in wages, salaries, and employee benefits, along with a $3.2 million increase in selling and marketing expenses as both revenue and operations expanded. Additionally, in Q4 2024, administrative costs were negatively affected by $3.7 million in professional fees associated with our initial public offering ("IPO") and an incremental $1.9 million expense on stock-based compensation due to the revaluation of the fair value of the equity instruments granted prior to the IPO. Adjusted SG&A as a percentage of sales improved to 29.6% in Q4 2024 from 30.5% in Q4 2023.

SG&A for Fiscal 2024 increased by $40.8 million or 15.0% compared to Fiscal 2023. This increase was primarily due to a $27.0 million rise in wages, salaries, and employee benefits, driven by higher labor costs as revenue grew and a larger proportion of stores were opened in the U.S., where labor tends to be more expensive than in Canada. Fiscal 2024 was also negatively impacted by $8.7 million of professional fees related to the IPO recorded in administrative costs. Adjusted SG&A as a percentage of sales improved to 31.2% in Fiscal 2024 from 33.7% in Fiscal 2023.

Net earnings and adjusted net earnings

Net earnings for Q4 2024 increased by $2.4 million or 8.5% compared to Q4 2023. This growth is mainly attributed to higher revenue, partially offset by higher SG&A.  Adjusted net earnings(1) for Q4 2024 increased by $7.0 million or 23.6% compared to Q4 2023.

Net earnings for Fiscal 2024 increased by $50.0 million or 58.2% compared to Fiscal 2023. This growth is attributable to higher revenue and a 200 basis points improvement in gross margin, partly offset by higher SG&A expenses and higher depreciation and amortization expenses. Adjusted net earnings for Fiscal 2024 increased by $59.1 million or 66.7% compared to Fiscal 2023.

Operating income and adjusted EBITDA

Operating income for Q4 2024 increased by $2.2 million or 4.6% to reach $50.7 million in Q4 2024 compared to $48.5 million in Q4 2023. Similarly, adjusted EBITDA for Q4 2024 increased by $11.6 million or 17.0% to reach $79.5 million compared to $67.9 million in Q4 2023. The adjusted EBITDA margin improved to 29.2% in Q4 2024, compared to 28.3% in the same period last year. This growth is primarily attributed to adjusted SG&A as a percentage of sales which decreased to 29.6% from 30.5% last year, reflecting the benefits of operating leverage and effective cost control.

Operating income for Fiscal 2024 increased by $67.0 million or 46.2% to reach $212.2 million in Fiscal 2024 compared to $145.2 million in Fiscal 2023. Similarly, adjusted EBITDA for Fiscal 2024 increased by $85.9 million or 39.5% to reach $303.3 million compared to $217.4 million in Fiscal 2023. The adjusted EBITDA margin improved to 31.6%, compared to 27.1% last year. This substantial increase is attributable to enhanced gross margin and adjusted SG&A as a percentage of sales which decreased to 31.2% from 33.7% last year.

Working capital

As of February 1, 2025, we have maintained a strong inventory turnover ratio of 8.54x, compared to 7.98x as of February 3, 2024, with current assets of $161.6 million (including $74.2 million in cash) and current liabilities of $137.2 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 $55.9 million in Q4 2024, up from $41.9 million in Q4 2023. While operating cash flow remained strong, the Company mainly benefited from lower CAPEX, which decreased from $28.9 million in Q4 2023 to $12.6 million in Q4 2024. On a full year basis, free cash flow reached $164.3 million compared to $92.4 million last year, an increase of 77.2%.

Net leverage ratio

The ...