Indigo loses $171 million in Q4 after taking large impairment, tax charges

 

TORONTO -- Indigo Books & Music Inc. is reporting a surge in losses caused by non-cash charges in the quarter that closed out its fiscal year ended March 28.

The Toronto-based book, gift and specialty toy retailer says it lost $171.3 million or $6.22 per diluted share in the fourth quarter, compared with a loss of $23.8 million or 86 cents per share a year earlier.

Indigo attributed the higher loss to impairment and deferred tax charges along with the decision to pay staff wages until the end of March even though stores were closed because of the COVID-19 pandemic.

Revenues for the quarter ended March 28 plunged 10.6 per cent to $178 million from $199.2 million in the fourth quarter of 2019.

For the full-year, it lost $185 million or $6.72 per share, compared with a loss of $36.8 million or $1.35 per share in 2019.

It recorded non-cash impairment losses of $56.6 million and a non-cash deferred income tax expense of $84.7 million to reflect "the broader economic challenges and material uncertainty introduced by COVID-19, as well as the company's recent operating losses."

Annual revenues decreased 8.5 per cent to $957.7 million, from $1.05 billion. Same-store sales for online and retail stores -- a key retail metric -- fell 7.9 per cent.

Indigo says its full-year revenues declined primarily because of its strategic direction to be less promotional and the absence of a hit book or toy item, along with COVID-19 disruptions and store closures during the March school break.

"Fiscal 2020 has been a critical year of restructuring, including repatriating our entire design studio from New York, and other efforts designed to lower our overall cost structure. This activity will continue and gain further traction right through fiscal 2021," said CEO Heather Reisman.