TORONTO, Feb. 7, 2017 /CNW/ - Indigo Books & Music Inc. (TSX: IDG), Canada's largest book, gift and specialty toy retailer reported 4.5% growth in revenue for its third quarter ended December 31, 2016.

Revenue for the quarter was $400.3 million, up $17.1 million from last year, despite operating three fewer stores.  Total comparable sales, which includes both online sales and comparable store sales, increased by 3.8% in the third quarter.

The increase in revenue was driven by continued double digit growth in the general merchandise business, with exceptional growth in the Lifestyle categories.  The core trade book business remained essentially flat as the business cycled over the trend for adult colouring books in the prior year.

Commenting on the results, CEO Heather Reisman said, "We are pleased to report 4.5% revenue growth in what was a tough season for many retailers.  On top of an exceptional 13% revenue growth last year, these results show Indigo has been doing the right things to engage our customers."

Indigo recognized net earnings of $40.0 million ($1.51 net earnings per common share for the quarter), compared to net earnings of $52.8 million, ($2.03 net earnings per common share for the same period last year).  The Company recognized an income tax expense of $14.5 million in the current period compared to a net income tax recovery of $2.1 million in the same period last year, due to the release of a deferred tax provision.

Excluding the impact of income taxes, the Company recognized net earnings before tax of $54.4 million in the current period compared to net earnings before tax of $50.7 million in the same period last year. Higher net earnings before taxes were driven by improved revenues and margins.

The Company ended the period with cash of $316.3 million and no debt, which demonstrates the strength of its financial position.

Indigo has recently started construction on the remodeling of four of its large format superstores, which will include a rebranding from Chapters to Indigo as part of the ongoing strategy to transform its store portfolio and enhance its customer experience.

Analyst/Investor Call

Indigo will host a conference call for analysts and investors to review these results at 9:00 a.m. (ET), February 8, 2017.  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 84286754. 

A playback of the call will also be available by telephone until 11:59 p.m. (ET) on February 15, 2017.  The call playback can be accessed after 11:00 a.m. (ET) on February 8, 2017, 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 286754#.  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 total comparable sales, 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. Total comparable sales 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. Total comparable sales is based on comparable retail store sales and includes online sales for the same period. Comparable retail 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 Love of Reading Foundation makes grants to high-needs elementary schools so they can transform their libraries with the purchase of new books and educational resources.  To date, the Love of Reading Foundation has committed over $23.5 million to 2,600 elementary schools, benefitting more than 750,000 students.  

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

SOURCE Indigo Books & Music Inc.

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