Clothing retailer Dynamite raises prices 9% amid trade tensions
Women's fast-fashion retailer Groupe Dynamite Inc. raised prices by 9% over the past year and plans to increase them at twice the rate of inflation for the foreseeable future, its chief executive officer said.
Shares on Tuesday rose by the most since the company went public last year after it reported strong first-quarter results, including higher revenue.
'If you extrapolate, the cost of our goods with or without tariffs is really a negligible piece of the average unit,' CEO Andrew Lutfy said in an interview.
Dynamite shifted production away from China during its first quarter to avoid higher tariffs on US imports. 'Most of our goods were manufactured in China,' Lutfy said. Now, products going to the US are 'actually the minority of our goods — we cut it by 50%, which is ridiculously agile.'
Transferring production to Asian countries such as Bangladesh and Cambodia came with one downside: 'There's been such a rush to those other countries that prices have actually gone up in those other markets. All the supply-chain inefficiencies are showing up,' Lutfy said, adding the company's input costs are up 'marginally.'
The Mount Royal, Que.-based firm owns about 300 stores in Canada and the US under the Garage and Dynamite banners. The firm's gross margin was 62.1% in the quarter ended May 3, down by 1.8 percentage points from the same period a year ago due mainly to the impact of US levies.
During the quarter, revenue increased by 20% to C$227 million ($167 million) from the previous year, and adjusted diluted earnings were 25 Canadian cents per share, beating analyst estimates by 3 cents, according to data compiled by Bloomberg.
The retailer revised its 2025 outlook for comparable store sales growth to a 7.5%-to-9% range from a 5%-to-6.5% range.
Lutfy said Dynamite can perform well in uncertain times because it sells relatively inexpensive apparel. 'Here in an environment where no one wants to pile on debt right now, we're at the other end of that spectrum, which is affordable indulgences. So a C$30 top is just going to make you happy. It's the price of a martini.'
'Groupe Dynamite product is resonating, real estate optimization is improving store productivity, and pricing/sourcing mitigation actions are offsetting tariffs,' TD Cowen analyst Brian Morrison wrote in a note to clients. 'Its solid outlook supports our view that Groupe Dynamite's valuation is too punitive.'
Dynamite's stock rose by as much as 18% in Toronto Tuesday, but remains below its initial public offering price of C$21. It was C$19.37 at 2:53 p.m.
'We're a new company, we're a new IPO and they want to see sustained performance,' Lutfy said of the market's reaction so far.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Fashion Network
5 hours ago
- Fashion Network
The Museum of Fine Arts, Houston to showcase heritage Indian weaves this summer
The Museum of Fine Arts, Houston will spotlight India's rich textile legacy in its summer exhibition "From India to the World: Textiles from the Parpia Collection." The showcase opens with a lecture by textile historian Rosemary Crill on June 22. "This special exhibition highlights the newly acquired Parpia Collection- one of the most significant private holdings of Indian textiles outside India, assembled with deep regional knowledge and artistry," announced the Museum of Fine Arts, Houston on Facebook. The exhibition serves to raise India's profile in the global textiles sphere. The exhibition features an extensive selection of Indian textiles spanning the 17th to early 20th century, drawn from the collection of Banoo and Jeevak Parpia, Glasstire reported. Regarded as one of the most significant private collections of Indian textiles outside India, the Parpia holdings include intricately woven court silks, boldly printed cottons, detailed tie-dyes, and fine Ikats. The pieces reflect the technical expertise and regional diversity of Indian artisans, highlighting India's longstanding role as a global hub for textile innovation. From India to the World traces the journey of Indian textiles across centuries and continents, from their trade along Asian routes to their high demand in Europe via Portuguese, Dutch, and British merchants. The exhibition builds on the museum's 2023 presentation Woven Wonders: Indian Textiles from the Parpia Collection, further cementing MFAH's role as a key institution for Indian textile heritage.
Fashion Network
5 hours ago
- Fashion Network
Clothing retailer Dynamite raises prices 9% amid trade tensions
Women's fast-fashion retailer Groupe Dynamite Inc. raised prices by 9% over the past year and plans to increase them at twice the rate of inflation for the foreseeable future, its chief executive officer said. Shares on Tuesday rose by the most since the company went public last year after it reported strong first-quarter results, including higher revenue. 'If you extrapolate, the cost of our goods with or without tariffs is really a negligible piece of the average unit,' CEO Andrew Lutfy said in an interview. Dynamite shifted production away from China during its first quarter to avoid higher tariffs on US imports. 'Most of our goods were manufactured in China,' Lutfy said. Now, products going to the US are 'actually the minority of our goods — we cut it by 50%, which is ridiculously agile.' Transferring production to Asian countries such as Bangladesh and Cambodia came with one downside: 'There's been such a rush to those other countries that prices have actually gone up in those other markets. All the supply-chain inefficiencies are showing up,' Lutfy said, adding the company's input costs are up 'marginally.' The Mount Royal, Que.-based firm owns about 300 stores in Canada and the US under the Garage and Dynamite banners. The firm's gross margin was 62.1% in the quarter ended May 3, down by 1.8 percentage points from the same period a year ago due mainly to the impact of US levies. During the quarter, revenue increased by 20% to C$227 million ($167 million) from the previous year, and adjusted diluted earnings were 25 Canadian cents per share, beating analyst estimates by 3 cents, according to data compiled by Bloomberg. The retailer revised its 2025 outlook for comparable store sales growth to a 7.5%-to-9% range from a 5%-to-6.5% range. Lutfy said Dynamite can perform well in uncertain times because it sells relatively inexpensive apparel. 'Here in an environment where no one wants to pile on debt right now, we're at the other end of that spectrum, which is affordable indulgences. So a C$30 top is just going to make you happy. It's the price of a martini.' 'Groupe Dynamite product is resonating, real estate optimization is improving store productivity, and pricing/sourcing mitigation actions are offsetting tariffs,' TD Cowen analyst Brian Morrison wrote in a note to clients. 'Its solid outlook supports our view that Groupe Dynamite's valuation is too punitive.' Dynamite's stock rose by as much as 18% in Toronto Tuesday, but remains below its initial public offering price of C$21. It was C$19.37 at 2:53 p.m. 'We're a new company, we're a new IPO and they want to see sustained performance,' Lutfy said of the market's reaction so far.
France 24
15 hours ago
- France 24
Mali junta takes control of Canadian-owned Barrick Gold mine amid tax dispute
A judge in Mali on Monday ordered Barrick Gold's Loulo-Gounkoto gold complex to be placed under provisional administration for six months in an ongoing dispute between the Canadian mining company and the West African nation's military government over unpaid taxes. Zoumana Makadji, an accountant and a former Malian minister of health has been appointed as the company's provisional administrator within 15 days, Judge Issa Aguibou Diallo said in a statement to Barrick's lawyers. Barrick is Africa's largest gold producer. The Loulo-Gounkoto complex and its Kibali mine – located in Congo – rank among the top 10 gold mines globally, according to the company's website. Barrick Gold has been in conflict with Mali's military rulers over alleged unpaid taxes and unfair contracts with past governments. The dispute culminated in an arrest warrant in December for Barrick CEO Mark Bristow and the company's offer to pay $370 million to the government. 'While Barrick's subsidiaries remain the legal owners of the mine, operational control has been transferred to an external administrator,' Barrick said in a statement on its website following the ruling. 'National economic interests' A source representing the Mali government told AFP that the ruling 'protects national economic interests' and avoids 'the sudden closure of the mine in the absence of a revised agreement'. In December, Barrick submitted a request for arbitration to the International Center for Settlement of Investment Disputes to address disagreements with Mali concerning the Loulo-Gounkoto complex, where the mines are located. Despite this, the government took a series of escalatory measures, including the arrest of Barrick Gold employees, who remain detained, and the suspension of gold exports. Barrick, which has been present in Mali for three decades, emphasized that the arbitration process was still ongoing and reaffirmed its commitment to 'engaging with the government of Mali, in parallel, to identify a constructive, mutually acceptable solution.' Detained staff 'used as leverage' The company's statement on Monday added: 'The ongoing detention of (our) employees – who remain unjustly imprisoned and used as leverage in this process – is deeply concerning and inconsistent with the trust, transparency and accountability required for a genuine long-term partnership. 'To date, no credible rationale has been presented to justify this detention and the Government's position, and the Government's ever-increasing demands have lacked both factual and legal foundation.' Mali is one of Africa's leading gold producers, but it has struggled for years with jihadi violence and high levels of poverty and hunger. The military seized power in 2020, and the government has placed foreign mining companies under growing pressure as it seeks to shore up revenues. In November, the CEO of Australian company Resolute Mining and two employees were arrested in Bamako. They were released after the company paid $80 million to Malian authorities to resolve a tax dispute and promised to pay a further $80 million in the coming months.
