Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Canada’s most-awarded
newsroom for a reason
Stay informed for a
lot less, cancel anytime
“Exemplary reporting on
COVID-19” – Herman L
per week
for 24 weeks
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Investors in Roots Corp. (ROOT-T) are waiting to see what kind of holiday season the Canadian retailer had amid pandemic lockdowns in key markets when its fourth-quarter earnings are released on Thursday.

The results, expected before the market opens, could move the stock, which has soared by more than 400 per cent since hitting its all-time low of 62 cents a year ago. Roots shares were pummelled by the initial pandemic closures last spring, alongside other brick-and-mortar retailers.

Shares of the iconic retailer, which went public in Oct. 2017 at $12 per share, were trading around $3.25 on the Toronto Stock Exchange mid-day Wednesday, an increase of more than 55 per cent year-to-date. The stock is down from highs above $13 in the spring of 2018.

Story continues below advertisement

Analysts are expecting the Toronto-based retailer to report revenue of $104-million and earnings of 32 cents per share in the fourth quarter, compared to sales of $127.5-million and earnings of 31 cents per share for the fourth quarter ended Feb. 1, 2020, before the pandemic led to widespread store closures.

Sales in the third quarter ended Oct. 31, 2020 were $72.9-million, down 15.5 per cent year-over-year but in line with the consensus forecast of $73.1-million and benefitting from a 40-per-cent jump in e-commerce sales. Several analysts increased their targets after that report in early December. The consensus target price today is $2.83, according to S&P Capital IQ. Among the six analysts that cover the stock, one has a “buy” recommendation and five a “hold” rating.

After the third-quarter earnings report, Roots chief executive officer Meghan Roach said the retailer entered the fourth quarter with new government restrictions “placing even tighter limitations on retail store operations in important markets across Canada.”

She also said the fourth quarter is the company’s largest “from a profitability and sales perspective,” adding that the restrictions “may negatively impact the momentum we saw leading into this period.”

Still, she said the company believes customers would continue to seek out “trusted brands, like Roots, for their holiday shopping,” while also citing “rapid casualization of the North American wardrobe” since the pandemic forced many people to work from home.

BMO Nesbitt Burns analyst Stephen MacLeod is expecting Roots to report sales of $96.8-million for the fourth quarter, a drop of about 24 per cent versus a year-earlier period, and adjusted net income to come in at $12.9-million or 31 cents per share. The company reported an adjusted profit of $13.3-million or 31 cents for the same quarter a year ago.

In a Jan. 21 note on the impact of lockdowns on the retail sector, Mr. MacLeod said he expected apparel companies to be hit harder over the holiday period than furniture retailers, “but in all cases we expect e-commerce to rise meaningfully during the period of closures as was the case in the initial spring 2020 pandemic-related lockdowns.”

Story continues below advertisement

In the December 2020 analyst call, Ms. Roach, who was named interim CEO in January 2020 and officially took on the role in May, highlighted the growth in e-commerce and curbside pickup options available at many of its stores. She also said the company has been pulling back on the heavy promotions it has done in the past, particularly on core items such as its sweats.

“We’re going to continue to implement that strategy across future years as we believe the Roots brand is loved by customers, and we believe that you don’t need heavy levels of promotion to increase that brand love. So going into future years, we’re going to continue on this strategy, but it is kind of important to mention that we’re in a pretty volatile environment right now. So we have to stay agile, and we will continue to shift our strategy as needed in future quarters and also into next year.”

As of Oct. 31, 2020, the company said it operated 113 corporate-retail stores in Canada, two corporate-retail stores in the U.S, 116 partner-operated stores in Taiwan, 28 partner-operated stores in China, two partner-operated stores in Hong Kong and its global e-commerce platform.

The company’s top shareholder is Searchlight Capital Partners, LP, with a 48.6-per-cent stake, according to S&P Capital IQ. Before being named Roots CEO, Ms. Roach was interim chief financial officer at the company, which she joined from Searchlight Capital Partners. Prior to Searchlight, she was a member of the private equity investment team at the Ontario Teachers’ Pension Plan.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies