TORONTO (Reuters) - Roots Corp (ROOT.TO) shares slumped to a record low on Wednesday after reporting a 44 percent drop in third-quarter profit and downgrading its sales and earnings targets for fiscal 2019.
The company known for its trademark beaver logo, rustic casual wear and Canadian-made leather boots blamed a lack of marketing, warm weather and strong promotions sales a year ago for the disappointing performance.
Net income fell to C$2.8 million ($2.09 million), or 7 Canadian cents, in the three months ended Nov. 3, from nearly C$5 million, or 12 cents a share, the company said in a filing.
It said it expects adjusted net income to be between C$20 million and C$24 million for the year ending January 2020, down from its earlier range of C$35 million to C$40 million.
Shares of the company plunged as much as 29.3 percent to C$3.21, their lowest level since they began trading in October 2017. They were trading down 18.7 percent as of 10:35 a.m. ET (1535 GMT), while the Toronto stock benchmark was up 1.2 percent.
Retailers including Roots have been struggling to maintain market share and boost sales as shoppers increasingly turn to e-commerce channels like Amazon.com Inc (AMZN.O).
“We faced significant headwinds due to three main factors,” Chief Executive Officer Jim Gabel said in the statement. A lack of a large marketing campaign, unseasonably warm fall weather and a boost to sales a year earlier due to promotions linked to the 150th anniversary of Canada’s confederation, were to blame, he said.
The company said revenue in the quarter fell 3 percent to C$87 million in the quarter, as sales in its retail and e-commerce segments dropped 8.4 percent.
Roots shares have dropped 67 percent this year, versus the broader index’s 6 percent loss.
Reporting By Nichola Saminather; editing by Jonathan Oatis