Reitmans Ord Shs V.RET

Alternate Symbol(s): RTMNF | RTMAF | V.RET.A

Reitmans (Canada) Limited is a Canada-based specialty apparel retailer for women and men, with retail outlets throughout the country. The principal business activity of the Company is the sale of women’s wear. The Company operates three different brands: Reitmans, Penningtons and RW&CO. The Reitmans banner is a specialty fashion destination. The Reitmans has an online presence and store locations across the country. Penningtons is a destination for plus-size fashion, ranging from sizes 14 to 32. Penningtons operates stores across Canada, as well as an ecommerce site at penningtons.com. RW&CO. operates stores averaging 4,500 square feet in premium locations in shopping malls, as well as on their e-commerce site. Specializing in menswear and womenswear, the brand delivers versatile, well-crafted collections and brand experiences. It operates approximately 391 stores under three distinct banners consisting of 226 Reitmans, 85 Pennington, and 80 RW&CO.

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Reitmans Ord Shs > Management Compensation

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Comment by TheCount11on May 25, 2022 9:50am

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Post# 34706054

RE:RE:RE:RE:RE:RE:Management Compensation

Out curiosity how are you modelling cashflows 5 years out if you are not modeling gross and operating margins for an apparel retailer?

All apparel retailers that import are in the same boat as far as US dollar and supply chain costs. I used a 56% gross margin for next year and beyond.

Adjusted EBITDA is provided by management. Thats why I used it. I agree that it is not the best measure. Actually its a terrible measure for industries undergoing structural change like auto manufacturing.

Reitmans has undergone its structural change as its omnichannel so using gross and old school operating margins (where all rent is included) should help model cashflows into the future. Exchange rates and shipping costs will fluctuate but there are no long term contracts so it evens out over time.

Line of credit interest and taxes are minimal over next couple of years. If company is being managed for shareholders is a 8% profit unreasonable?

profit margin	662
0.08	52.96
0.06	39.72
0.04	26.48
0.02	13.24

Even with a 2% profit margin thats 13M. If I am being honest here 2% is unacceptable but shares likely stay inexpensive.

Buying back 5M shares at average price of $1.50 would cost $7.5M.

If company is being managed for shareholders $10 is a very reasonable price based on cashflows vs share count.

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