A shopper is stopped by a window display at Le Chateau's Eaton Centre location in Montreal.The Globe and Mail
Le Chateau Inc. reported a more than 50 per cent drop in its second-quarter net earnings Friday, along with a similar-size cut to its quarterly dividend.
The Montreal-based fashion apparel and footwear retailer, which has being moving to reposition itself in the market with higher-end merchandise, said net earnings for the three months ended July 30 were $3.5-million or 14 cents per share.
That compared with net earnings of $8.3-million or 34 cents per share in the same year-earlier period.
Overall sales revenue fell 2 per cent to $84.8-million from $86.5-million, while same-store sales were off 5 per cent, although both sales and earnings were an improvement over the first quarter, the company said.
Le Chateau said its gross margin percentage in the second quarter decreased to 65.6 per cent from 68.9 per cent last year, due to "increased promotional activity in a difficult retail environment."
Meanwhile, the company announced a quarterly dividend of 8 cents per share payable Nov. 15 to shareholders of record on Oct. 28 and noted it was the 72nd consecutive dividend declared by company.
However, the payout was down sharply from its previous dividend of 17.5 cents.
Stock in Le Chateau, which reported after markets closed, was unchanged Friday at $5.99 on the Toronto Stock Exchange.