Indigo Books & Music reported that its revenue was down 8.1% in its first quarter compared to the same quarter in the previous year and that its net loss increased to C$15 million from C$5.5 million a year ago.
The company attributed most of the decline to the fact that revenues were pushed higher in the previous year by “the phenomenal success of the Fifty Shades and Hunger Games trilogies.” Excluding revenue from those two series, Indigo’s report stated that its C$171.5 million in revenue for the first quarter, which ended on June 29, would be only be down by 1.3% from the same quarter last year. The report also noted that Indigo is operating eight fewer small format stores than it was last year.
Revenue in Indigo and Chapters superstores was down 7.3% and in small format stores by 13.1%, but calculating out the blockbuster revenues from the two trilogies, those numbers dropped to 1.6% and 1.1%, respectively.
Online sales were flat compared to last year.
The higher loss was attributed to not only lower sales but “higher inventory markdown as well as intentionally higher selling and administrative expenses compared to last year.” The report noted that Indigo had invested more in marketing and its general merchandise capabilities as part of its strategic transformation to broaden its product offerings.
During the quarter, Indigo unveiled its exclusive Poppin line designer desktop and office products. Indigo also announced that it intends to open 39 tech shops within its stores in the second and third quarter that, in addition to Kobo devices, will offer a selection of Apple products, including iPads and iPods
Also during the quarter, Indigo announced for the ninth consecutive year that its Love of Reading Foundation will donate C$1.5 million to 20 high-needs elementary schools in an effort to bolster literacy and transform school libraries across the country.