Reitmans Ord Shs V.RET

A Statistical Outlook for Q1 of 2023

[nozzpack]

A comparison with Q1 of 2022 may be instructive due to the fact that entry 
financials are much better.

That is, RET is entering Q1 of 2023 with $142 million of  Inventory at cost compared to $119 million in 2022  which is a $23 million gain in statistical
status.

I have made the assumption that Q1 of 2023 relicates that of Q1 of 2022 except that I have boosted COG to 0.49 per unit of sales  in 2023 versus 0.455   in 2022.

The results are shown in the Table below .

They show that we have considerable opportunity to at least match 2022 Q1 net  operating cash,  and gains in cash,  as in Q1 of 2022 with potential upside of double Q1 of 2022 key metrics

Comments would be appreciated

	Inventory In	Sales	COG	Inventory Out	New Inventory costs	Net Cash flow ( Added Cash)
Q1 2022	$119 m	$154 m	$70 m	$138 m	$89 m	$18 m ( $10 m )
Q2 2023	$142 m	$154m	$75 m	$138  m	71 M	$36 m ( $20m )

[Lllennn]

It's the streets reaction to earnings, the company/ stock is worth much more than $3, I wouldn't sell were I could be left behind, the streeet always wants I for nothing because they need such a large multiplier, it's probably worth +$52/share imo.

[nozzpack]

At cost with an average 53% gross margin, the $138 million in Finished goods Inventory entering Q2 of 2023 can supply nearly $300 million in Retail sales. Q2 sales were $205 million in 2022, so there would still be sufficient Inventory entering Q3 of 2023 to cover $100 million in Q3 sales.   So, by judicious inventory curation, Management have lots of room to vary the amount of new

[savyinvestor333]

I think it would be wrong to assume all the inventory is currently slated for the first quarter. I would think there could be quitw a bit of it that was/ is for the  winter and fall seasons. I'm pretty sure they don't  sell out all inventory at the end of the season.

[nozzpack]

Inventory is specifically stated to be " for the Spring Sales Season " which is Q1 and Q2

[savyinvestor333]

  From the MD&A "inventories are higher primarily due to the normal build-up for the spring selling season and a higher average merchandise purchase cost; "  That may  That may explain the jump from $119 million last year to $142 million now.  But it could also mean some things aren't selling. Last year the Inventories were $119 million at this time so I

[Dali812]

I think your logic is quiet right...my concern is if we cant see the forest for the trees... in 2012 this company had sales little over 1 bilion cad... and since then the sales were stagnating or slightly decreasing to around 930 milions...they were paying 0.2 anual dividend and the share price went down from 15 cad to 3 cad and then bankrupcy... this company was a dividend cash cow and the share

[Lllennn]

In all of your thoughts you didn't mention store count. I have a lot of experience with buying companies off the bottom, this one isn't a dog's breakfast like ATP Atlantic Power, I bought that one and did very well and the people running it admitted imo they have no idea how to make money with the company. This one here (RET) you have a complete company (Nothing to Bolt On), with cash

[Lllennn]

In all of the analyist of this company I've never heard anyone say "The value of RET Customers", right now Bay St and Burrard St has a value of zero, maybe even less than zero, I"m the only one here it seems to give value to the Customer when considering the value of this company. Can you imagine someone on Bay St saying muiltiple of X0 on this company and everyone else

[filoux004]

Politely, not really following your line of thought. Care to expand. Thanks. DD and glta

[Torontojay]

I'm not sure I follow.  Is the chart on the lhs at the bottom suppose to read Q1,2023?  S,g&a is likely to be much higher in Q1 fiscal 2024 for the following reasons:  S,g&a received a government subsidy of $9.1m and I don't see any reason why this should continue. The government subsidy reduced the operational expenses of the company. In addition, there

[nozzpack]

There were no subsidies in F23.....the year which ended Jan /23. You are confusing $21,5 million in subsidies in F22 with the year 2022. Note that Q4 entered with $160 million in Inventory at cost, sold $104 million of that to generate $211 million in sales in Q4, then added $86 million of new Inventory to exit Q4 /23 with $142 million in Inventory at cost. That level of Inventory converts to

[Torontojay]

Nozz, it's right in the year end md&a.    Selling, Distribution and Administrative Expenses Total selling, distribution and administrative expenses of $400.4 million for fiscal 2023 increased by $101.7 million, or 34.0%, as compared to fiscal 2022 primarily attributable to the following: • increased store operating costs due primarily to an increase in store

[nozzpack]

You are wrong . Go to the table on the top of page 4 of the M&A and you will see the subsidy summary by quarter and Fiscal Year 22 and 23....we are now in F24. ZERO federal supbsidies for F23 and just over $22 million for F22

[Torontojay]

I see what they did.  They worded the statement in a misleading manner in the paragraph I sent. Looking at this chart it now makes sense as the difference between the subsidies received is $21.5m or the difference between $22.7m and $1.2m. Certainly, the covid relief programs should have been over by now.  Either way, we are still going to see further cost pressures on the business

[savyinvestor333]

Yes and that brings up another question, of why have they not reinstated the Foreign Currency Hedges