Online Sales grow by 17.9%
Earnings improve by $19.8M

TORONTO, Feb. 2, 2016 /CNW/ - Indigo Books & Music Inc. (TSX: IDG), Canada's largest book, gift and specialty toy retailer reported 12.9% growth in revenue for its third quarter ended December 26, 2015, marking Indigo's ninth consecutive quarter of growth.

Revenue for the quarter was $383.2 million, up $43.8 million from last year, despite operating one less superstore and four fewer small format stores.  On a comparable store basis, Indigo and Chapters superstores posted 15.5% growth, while Coles and Indigospirit small format stores increased by 13.4%.  Sales from Indigo's online channel, indigo.ca, grew by 17.9%.

Revenue growth was driven by continued double digit growth in the general merchandise business and high single digit growth in the core book business.

Commenting on the results, CEO Heather Reisman said, "We're delighted to be reporting such a meaningful improvement in our financial results for Q3.  As with every retailer, our third quarter is critical to the business and Indigo performed strongly across all categories and in all channels.  We're incredibly proud of the Indigo team for delivering an outstanding assortment of books, gifts and toys, coupled with amazing service to our customers for the holidays."

Indigo recognized net earnings of $52.8 million which is $2.03 net earnings per common share for the quarter, compared to net earnings of $33.0 million, or $1.28 net earnings per common share for the same period last year.  The improvement of $19.8 million was primarily driven by increased revenues at a higher margin rate and a lower tax expense.    

During the quarter, Indigo launched two expanded IndigoKids locations, at Chapters Chinook Centre in Calgary and Chapters West Edmonton Mall in Edmonton, bringing the best kids' books and toys, as well as the highly popular American Girl® Specialty Boutique to both locations in time for holiday gift giving.

Also in the quarter, the Indigo Love of Reading Foundation celebrated the global movement of Giving Tuesday by distributing over $1 million in Indigo e-gift cards to over 400 high needs elementary schools.  Our Indigo, Chapters and Coles store teams across the country were delighted to deliver this incredible surprise to some of their local schools, who will use the money to bolster their libraries with books, learning tools and educational resources. These gifts would not have been possible without the generous donations and support from Indigo customers.

Analyst/Investor Call

Indigo will host a conference call for analysts and investors to review these results at 9:00 a.m. (ET) tomorrow, February 3, 2016.  The call can be accessed by dialling 416-764-8688 from within the Toronto area, or 1-888-390-0546 outside of Toronto.  The eight digit participant code is 53408737#. 

A playback of the call will also be available by telephone until 10:00 a.m. (ET) on Wednesday February 10, 2016.  The call playback can be accessed after 11:00 a.m. (ET) on February 3, 2016, by dialing 416-764-8677 from within the Toronto area, or 1-888-390-0541 outside of Toronto.  The six-digit replay passcode number is 408737#.  The conference call transcript will be archived in the Investor Relations section of the Indigo website, www.indigo.ca.

Forward-Looking Statements

Statements contained in this news release that are not historical facts are forward-looking statements which involve risk and uncertainties that could cause results to differ materially from those expressed in the forward-looking statements. Among the key factors that could cause such differences are: general economic, market or business conditions in Canada; competitive actions by other companies; changes in laws or regulations; and other factors, many of which are beyond the control of the Company.

Non-IFRS Financial Measures

The Company prepares its unaudited interim condensed consolidated financial statements in accordance with International Financial Reporting Standards and International Accounting Standards 34, "Interim Financial Reporting."  In order to provide additional insight into the business, the Company has also provided non-IFRS data, including comparative store sales growth, in the press release above. This measure does not have a standardized meaning prescribed by IFRS and is therefore specific to Indigo and may not be comparable to similar measures presented by other companies. Comparative store sales growth is a key indicator used by the Company to measure performance against internal targets and prior period results. This measure is commonly used by financial analysts and investors to compare Indigo to other retailers. Comparable store sales are defined as sales generated by stores that have been open for more than 12 months on a 52-week basis.

About Indigo Books & Music Inc.

Indigo is a publicly traded Canadian company listed on the Toronto Stock Exchange (IDG). As the largest book, gift and specialty toy retailer in Canada, Indigo operates in all provinces under different banners including Indigo Books & Music; Indigo Books, Gifts, Kids; Indigospirit; Chapters; and Coles. The online channel, indigo.ca, offers a one-stop online shop with a robust selection of books, toys, home décor, stationery, and gifts.

Indigo founded the Indigo Love of Reading Foundation in 2004 to address the underfunding of public elementary school libraries. Every year the Indigo Love of Reading Foundation grants $1.5 million to 20 high-needs elementary schools so they can transform their libraries with the purchase of new books and education resources. To date, the Indigo Love of Reading Foundation has committed over $22.9 million to over 2,000 schools through our signature programs.

To learn more about Indigo, please visit the Our Company section at indigo.ca.

SOURCE Indigo Books & Music Inc.