Indigo expects at least 10-12 months of COVID-19 'damaging set of conditions'

TORONTO — Indigo Books & Music Inc. expects at least 10 to 12 months of a "damaging set of conditions" from the COVID-19 pandemic, said chief executive Heather Reisman, the day after the company reported a fourth-quarter loss of $171.3 million.

"This pandemic is, to be sure, a seismic, once-in-a-lifetime event," Reisman told a conference call with analysts Wednesday.

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"For Indigo, like so many others, the impact has been and will continue to be significant."

She said governments deemed the Toronto-based retailer as non-essential so it was forced to close all 196 of its stores two weeks before the close of its financial year, which ended March 28.

Prior to the closures, the company expected to close its financial year with an essentially flat figure for adjusted earnings before interest, taxes, depreciation and amortization, she said.

Indigo had expected the first quarter of its new financial year to be strong, said Reisman, "putting us back on track to real profitability."

However, the coronavirus is now impacting that trajectory, she said, noting the company still feels "truly optimistic" about its medium-term trajectory.

Indigo lost $6.22 per diluted share in its fourth quarter compared to a $23.8-million loss or 86 cents per share in the same quarter the previous year.

It attributed the higher loss to impairment and deferred tax charges, as well as continuing to pay staff wages until the end of March despite store closures.

This report by The Canadian Press was first published June 24, 2020.

Companies in this story: (TSX:IDG)

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