Birks Group Inc 6-K, filed Nov 27, 2024
Birks Group Inc. (BGICF)
About this 6-K
Birks Group Inc filed this 6-K on November 27, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 or 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November, 2024
Commission file number: 001-32635
BIRKS GROUP INC.
(Translation of Registrant’s name into English)
2020 Robert Bourassa
Suite 200
Montreal, Québec
Canada
H3A 2A5
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
☒ Form 20-F ☐ Form 40-F
CONTENTS
The following documents of the Registrant are submitted herewith:
| 99.1. | Press release dated November 27, 2024 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BIRKS GROUP INC. | ||||||
| (Registrant) | ||||||
| By: | /s/ Katia Fontana | |||||
| Date: November 27, 2024 | Vice President and Chief Financial Officer | |||||
EXHIBIT 99.1
| Company Contacts: |
| Katia Fontana |
| Vice President and Chief Financial Officer |
| (514) 397-2592 |
| For all press and media inquiries, please contact: |
| Press@birks.com |
BIRKS GROUP INC. REPORTS MID-YEAR FISCAL 2025 RESULTS
Montreal, Quebec. November 27, 2024 - Birks Group Inc. (the “Company” or “Birks Group”) (NYSE American: BGI), today reported its financial results for the twenty-six-week period ended September 28, 2024.
Highlights
All figures presented herein are in Canadian dollars.
For the twenty-six-week period ended September 28, 2024 (“Fiscal 2025”), the Company reported net sales of $80.1 million, a decrease of $7.7 million or 8.8% from the comparable prior period ended September 23, 2023 (“Fiscal 2024”). Comparable store sales for the twenty-six-week period ended September 28, 2024, decreased by 4.9% compared to the corresponding period of Fiscal 2024. The decrease in net sales and comparable store sales is mainly due to lower sales of branded jewelry due to the exit of a brand from two stores. When excluding the third-party jewelry brand movement, the comparable store sales increased by 7.5%, mainly driven by timepiece sales. The Company reported a gross profit of $31.3 million, a decrease of $4.8 million or 13.3% compared to the corresponding period in Fiscal 2024, due to lower sales volume resulting from the exit of a jewelry brand from two stores. Gross profit as a percentage of sales was 39.0% for the twenty-six week period ended September 28, 2024, a decrease of 210 basis points from the gross profit as a percentage of sales of 41.1% in the twenty-six-week period ended September 23, 2023.
Mr. Jean-Christophe Bédos, President and Chief Executive Officer of Birks Group, commented: “Although our net sales and comparable store sales for the first half of Fiscal 2025 are lower than the corresponding period in Fiscal 2024, when excluding the effect of the third-party jewelry brand movement, comparable store sales are positive. We are pleased with the renovation projects that were undertaken in the last year at our Chinook and Laval stores as they continue to generate greater sales post opening which also contributed to our results.”
Financial overview for the twenty-six-week period ended September 28, 2024
| • | Total net sales for the twenty-six-week period ended September 28, 2024 were $80.1 million compared to $87.8 million for the twenty-six-week period ended September 23, 2023, a decrease of $7.7 million or 8.8%. This sales decrease is attributable primarily to the decrease in sales of branded jewelry related to a brand exit from two stores, offset by an increase in branded timepieces sales. |
| • | Comparable store sales decreased by 4.9% during the twenty-six-week period ended September 28, 2024 compared to the twenty-six-week period ended September 23, 2023. The decrease in comparable store sales is mainly attributable to a third-party jewelry brand movement. When excluding the third-party jewelry brand movement, the comparable store sales increased by 7.5%, mainly driven by timepiece sales. |
| • | Total gross profit was $31.3 million, or 39.0% of net sales, for the twenty-six-week period ended September 28, 2024, compared to $36.1 million, or 41.1% of net sales for the twenty-six-week period ended September 23, 2023. This decrease of $4.8 million in gross profit is primarily attributable to lower sales volume in the retail segment, specifically in branded jewelry, mainly due to a brand exit. The decrease in gross profit percentage of 210 basis points is due to higher packaging and service costs, an increase in foreign exchange loss of $0.2 million from the comparable period in Fiscal 2024, partially offset by a favorable product mix in branded timepieces. |
| • | SG&A expenses in the twenty-six-week period ended September 28, 2024 were $27.8 million, or 34.7% of net sales, compared to $32.5 million, or 37.0% of net sales in the twenty-six-week period ended September 23, 2023, a decrease of $4.7 million. The main drivers of the decrease in SG&A expenses in the period include lower marketing costs ($1.5 million) mainly due to lower brand development initiatives, lower occupancy costs ($2.1 million) due to store closures and store lease modifications, lower compensation costs ($0.3 million) due to lower sales volume and head count reduction, lower credit card fees ($0.3 million) and lower delivery and transport costs ($0.1 million) due to lower sales volume and a decrease in general and variable operating costs ($0.8 million). This decrease was partially offset by greater stock-based compensation ($0.4 million) mainly related to the fluctuation of the stock price. As a percentage of sales, SG&A expenses in the twenty-six-week period ended September 28, 2024 have decreased by 2.6% as compared to the twenty-six-week period ended September 23, 2023. |
| • | The Company recognized a net loss for the twenty-six-week period ended September 28, 2024 of $3.1 million, or ($0.16) per share, compared to a net loss for the twenty-six-week period ended September 23, 2023 of $1.5 million, or ($0.08) per share. |
| • | The Company’s EBITDA (1) for the twenty-six-week period ended September 28, 2024 was $4.7 million, a decrease of $0.3 million, compared to EBITDA(1) of $5.0 million for the twenty-six-week period ended September 23, 2023; and |
| • | The Company reported an operating loss of $0.3 million for the twenty-six-week period ended September 28, 2024, a decrease of $0.8 million, compared to a reported operating income of $0.5 million in the twenty-six-week period ended September 23, 2023. |
| (1) | This is a non-GAAP financial measure defined below under “Non-GAAP Measures” and accompanied by a reconciliation to the most directly comparable U.S. GAAP financial measure. |
About Birks Group Inc.
Birks Group is a leading designer of fine jewelry, and an operator of luxury jewelry, timepieces and gifts retail stores in Canada. The Company operates 18 stores under the Maison Birks brand in most major metropolitan markets in Canada, one retail location in Montreal under the Birks brand, one retail location in Montreal under the TimeVallée brand, one retail location in Calgary under the Brinkhaus brand, one retail location in Vancouver operated under the Graff brand, one location in Vancouver under the Patek Philippe brand, and three retail locations in Laval, Ottawa and Toronto under the Breitling brand. Birks fine jewelry collections are also available through select SAKS Fifth Avenue stores in Canada and the U.S., select Mappin & Webb and Goldsmiths locations in the United Kingdom, in Mayors stores in the United States, in W. Kruk stores in Poland as well as several jewelry retailers across North America. Birks was founded in 1879 and has become Canada’s premier retailer and designer of fine jewelry, timepieces and gifts. Additional information can be found on Birks’ web site, www.birks.com.
NON-GAAP MEASURES
The Company reports financial information in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). The Company’s performance is monitored and evaluated using various sales and earnings measures that are adjusted to include or exclude amounts from the most directly comparable GAAP measures (“non-GAAP measures”). The Company presents such non-GAAP measures in reporting its financial results to assist in business decision making and to provide key performance information to senior management. The Company believes that this additional information provided to investors and other external stakeholders will allow them to evaluate the Company’s operating results using the same financial measures and metrics used by the Company in evaluating performance. The Company does not, nor does it suggest that investors and other external stakeholders should, consider non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. These non-GAAP measures may not be comparable to similarly-titled measures presented by other companies. In addition to our results determined in accordance with U.S. GAAP, we use non-GAAP measures including “EBITDA“.
EBITDA
“EBITDA” is defined as net income (loss) from continuing operations before interest expense and other financing costs, income taxes expense (recovery) and depreciation and amortization.
EBITDA
(in thousands)
| For the twenty-six-week period ended | ||||||||
| September 28, 2024 | September 23, 2023 | |||||||
| Net (loss) income (U.S. GAAP measure) |
(3,081 | ) | (1,482 | ) | ||||
| as a % of net sales |
-3.8 | % | -1.7 | % | ||||
| Add the impact of: |
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| Interest expense and other financing costs |
4,034 | 3,350 | ||||||
| Depreciation and amortization |
3,701 | 3.089 | ||||||
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| EBITDA (non-GAAP measure) |
$ | 4,654 | $ | 4,957 | ||||
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| as a % of net sales |
5.8 | % | 5.6 | % | ||||
Forward Looking Statements
This press release contains forward- looking statements which can be identified by their use of words like “plans,” “expects,” “believes,” “will,” “anticipates,” “intends,” “projects,” “estimates,” “could,” “would,” “may,” “planned,” “goal”, “continue”, “strategy” and other words of similar meaning. All statements that address expectations, possibilities or projections about the future, including without limitation, statements about anticipated economic conditions, generation of shareholder value, and our strategies for growth, performance drivers, expansion plans, sources or adequacy of capital, expenditures and financial results are forward-looking statements.
Because such statements include various risks and uncertainties, actual results might differ materially from those projected in the forward-looking statements and no assurance can be given that the Company will meet the results projected in the forward-looking statements. These risks and uncertainties include, but are not limited to the following: (i) a decline in consumer spending or deterioration in consumer financial position; (ii) economic, political and market conditions, including the economies of Canada and the U.S., and the influence of inflation on consumer spending, which could adversely affect the Company’s business, operating results or financial condition, including its revenue and profitability, through the impact of changes in the real estate markets, changes in the equity markets and decreases in consumer confidence and the related changes in consumer spending patterns, the impact on store traffic, tourism and sales; (iii) the impact of fluctuations in foreign exchange rates, increases in commodity prices and borrowing costs and their related impact on the Company’s costs and expenses; (iv) the Company’s ability to maintain and obtain sufficient sources of liquidity to fund its operations, to achieve planned sales, gross margin and net income, to keep costs low, to implement its business strategy, maintain relationships with its primary vendors, to source raw materials, to mitigate fluctuations in the availability and prices of the Company’s merchandise, to compete with other jewelers, to succeed in its marketing initiatives (including with respect to Birks branded products), and to have a successful customer service program; (v) the Company’s plan to evaluate the productivity of existing stores, close unproductive stores and open new stores in new prime retail locations, and invest in its website and e-commerce platform; (vi) the Company’s ability to execute its strategic vision; (vii) the Company’s ability to invest in and finance capital expenditures, and (viii) the Company’s ability to maintain its listing on the NYSE American or to list its securities on another national securities exchange.
Information concerning factors that could cause actual results to differ materially is set forth under the captions “Risk Factors” and “Operating and Financial Review and Prospects” and elsewhere in the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on July 16, 2024, as amended on July 18, 2024, and subsequent filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this statement or to reflect the occurrence of unanticipated events, except as required by law.
BIRKS GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED
(In thousands, except per share amounts)
| 26 weeks ended September 28, 2024 |
26 weeks ended September 23, 2023 |
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| Net sales |
$ | 80,118 | $ | 87,817 | ||||
| Cost of sales |
48,859 | 51,750 | ||||||
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| Gross profit |
31,259 | 36,067 | ||||||
| Selling, general and administrative expenses |
27,827 | 32,483 | ||||||
| Depreciation and amortization |
3,701 | 3,089 | ||||||
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| Total operating expenses |
31,528 | 35,572 | ||||||
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| Operating (loss) income |
(269 | ) | 495 | |||||
| Interest and other financial costs |
4,034 | 3,350 | ||||||
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| (Loss) income before taxes and equity in earnings of joint venture |
(4,303 | ) | (2,855 | ) | ||||
| Income taxes (benefits) |
— | — | ||||||
| Equity in earnings of joint venture, net of taxes |
1,222 | 1,373 | ||||||
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| Net (loss) income |
(3,081 | ) | (1,482 | ) | ||||
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| Weighted average common shares outstanding: |
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| Basic |
19,226 | 18,953 | ||||||
| Diluted |
19,226 | 18,953 | ||||||
| Net (loss) income per common share: |
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| Basic |
$ | (0.16 | ) | $ | (0.08 | ) | ||
| Diluted |
$ | (0.16 | ) | $ | (0.08 | ) | ||
BIRKS GROUP INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| September 28, 2024 | March 30, 2024 | |||||||
| Assets |
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| Current Assets: |
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| Cash and cash equivalents |
$ | 1,789 | $ | 1,783 | ||||
| Accounts receivable and other receivables |
7,004 | 8,455 | ||||||
| Inventories |
105,605 | 99,067 | ||||||
| Prepaid expenses and other current assets |
2,794 | 2,913 | ||||||
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| Total current assets |
117,192 | 112,218 | ||||||
| Long-term receivables |
1,320 | 1,571 | ||||||
| Equity investment in joint venture |
5,344 | 4,122 | ||||||
| Property and equipment |
26,771 | 25,717 | ||||||
| Operating lease right-of-use assets |
34,307 | 51,753 | ||||||
| Intangible assets and other assets |
8,113 | 7,887 | ||||||
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| Total non-current assets |
75,855 | 91,050 | ||||||
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| Total assets |
$ | 193,047 | $ | 203,268 | ||||
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| Liabilities and Stockholders’ Equity (Deficiency) |
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| Current liabilities: |
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| Bank indebtedness |
$ | 71,152 | $ | 63,372 | ||||
| Accounts payable |
45,253 | 43,011 | ||||||
| Accrued liabilities |
5,972 | 6,112 | ||||||
| Current portion of long-term debt |
5,150 | 4,352 | ||||||
| Current portion of operating lease liabilities |
8,322 | 6,430 | ||||||
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| Total current liabilities |
135,849 | 123,277 | ||||||
| Long-term debt |
22,484 | 22,587 | ||||||
| Long-term portion of operating lease liabilities |
38,681 | 59,881 | ||||||
| Other long-term liabilities |
4,259 | 2,672 | ||||||
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| Total long-term liabilities |
65,424 | 85,140 | ||||||
| Stockholders’ equity (deficiency): |
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| Class A common stock – no par value, unlimited shares authorized, issued and outstanding 11,593,391 (11,447,999 as of March 30, 2024) |
41,468 | 40,725 | ||||||
| Class B common stock – no par value, unlimited shares authorized, issued and outstanding 7,717,970 |
57,755 | 57,755 | ||||||
| Preferred stock – no par value, unlimited shares authorized, none issued |
— | — | ||||||
| Additional paid-in capital |
21,082 | 21,825 | ||||||
| Accumulated deficit |
(128,557 | ) | (125,476 | ) | ||||
| Accumulated other comprehensive income (loss) |
26 | 22 | ||||||
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| Total stockholders’ equity (deficiency) |
(8,226 | ) | (5,149 | ) | ||||
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| Total liabilities and stockholders’ equity (deficiency) |
$ | 193,047 | $ | 203,268 | ||||
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