TORONTO — Indigo Books & Music Inc. trimmed its losses and increased revenues in its second quarter, buoyed by a renewed interest in reading and growing sales tied to at-home learning and kids entertainment.
The Toronto-based retailer said online sales and curbside pickup helped the company post a strong financial recovery despite shopping in brick-and-mortar stores continuing to lag.
"Traffic remains well below historical levels, with the result that sales are still not where they were pre-COVID," CEO Heather Reisman said Wednesday during an investor call.
"Our downtown stores, generally our biggest contributors both in sales and profits, continue to be particularly impacted by changes in work habits," she said, noting that those stores are seeing "very limited activity compared with normal times."
Indigo said it lost $17.5 million or 63 cents per share for the three months ended Sept. 26, compared with a loss of $20.5 million or 74 cents per share a year earlier.
Revenues increased by almost one percentage point to $205.3 million from $203.4 million.
Indigo attributed the gain to a more than doubling of its online channel, with growth of 113.6 per cent, propelled by interest in the core categories of reading, wellness, at-home learning and entertainment.
Also during the quarter, Reisman said the company managed to sustain the new online customers it gained when stores were fully shut down and expanded its loyalty rewards program.
The retailer also added new ways to shop in the quarter, including a click-and-collect service and same-day delivery through a partnership with Instacart.
"These additional channels allow us to meet our customers needs however they wish to shop," Reisman said.
"We also look forward to this service taking pressure off our store teams during the holiday period when they are normally chockablock full."
Meanwhile, Indigo also launched the new store brand Oui during the quarter, under the direction of the store's chief creative officer Nathan Williams.
Reisman said the retailer beat its sales targets for Oui and in some cases sold out of inventory.
With no outstanding debt and a cash balance of $137.5 million, Indigo said it is positioned to "manage through these very uncertain times."
"Our team has put out extraordinary effort over the last eight months and meaningfully pushed our business forward notwithstanding the challenges of operating in a COVID environment," Reisman said in a statement.
Looking forward, Reisman said the long-awaited new book by Barack Obama will be available in time for the holiday period.
"We continue to take the long view of our business, focusing on both how we meet the customer and our overall economics."
This report by The Canadian Press was first published Nov 4, 2020.
Companies in this story: (TSX:IDG).
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