Stock market news for investors: Cineplex, Roots, Delta and more

For the fashion industry, Trump’s tariffs stand to upend supply chains because they make it more expensive to move materials and inventory around the world.

Beyond the duties he hit Canada with, the U.S. imposed tariffs on countries like Bangladesh, China, India, Indonesia and Taiwan where many companies make garments and accessories because of their lower labour costs. 

While the latest rounds of tariffs don’t impede goods moving between those countries and Canada, domestic brands that ship supplies and stock directly to their U.S. stores from those countries are affected.

According to its website, Roots only has two stores in the U.S. and produces leather goods like handbags, backpacks and jackets at a Toronto facility. 

Some of its clothing is sourced from countries in Asia and Europe, but the company does not disclose how much comes from each region, Roach said in an email to The Canadian Press.

“Given that we ship all of our goods to Canada, these products are not impacted by the tariffs set out by the U.S. on other countries,” she wrote.

Its Canadian heritage also makes Roots more likely to benefit from the growing wave of shoppers supporting domestic businesses.

So far, Roach said the movement has boosted searches for products on the company’s website, but it’s hard to parse out how many of the company’s recent wins stem from the buy Canadian sentiment.

“What we saw was momentum in the Q4 period continuing into Q1, so it’s very difficult for us to tell specifically what any uplift might be from Buy Canada as opposed to our businesses continuing to trend well out of the fourth quarter,” Roach said on the analyst call.

Roots said Wednesday that its fourth-quarter total sales amounted to $110.8 million, up from $108.2 million in the same quarter last year. 

Direct-to-consumer sales for the period ended Feb. 1 totalled $101.2 million, up from $97.8 million a year ago, while partner and other sales amounted to $9.6 million, down from $10.5 million.

Roach attributed some of the bumps to new marketing initiatives and artificial intelligence-based inventory management. 

They and a $50-million impairment charge on intangible assets, which Roach said was a non-cash accounting adjustment, contributed to a quarter that saw Roots incur a loss of $21.7 million or 54 cents per share. 

The result compared with a profit of $14.6 million or 36 cents per share a year earlier.

On an adjusted basis, Roots earned 40 cents per share in its latest quarter compared with an adjusted profit of 36 cents per share a year earlier.

Given that apparel businesses plan so far in advance, Roots also had confidence in how it will handle fall and winter.

The merchandise stocked at these times of year tends to include products it can push year-round, so inventory “won’t go bad at the end of the season,” Roach said.

Cogeco’s wireless service launch plans on track as pre-registrations open: CEO

Cogeco Inc. says its plans to offer mobile service in Canada are on track and it has begun signing up customers who already subscribe to its other services.

President and CEO Frédéric Perron told analysts on the company’s second-quarter earnings call Thursday that Cogeco’s wireless launch preparations are “progressing well” and demand has exceeded expectations since opening up pre-registrations for existing Canadian wireline customers.

The Montreal-based telecommunications company has teased plans to launch wireless coverage across its broadband footprint in Ontario and Quebec in the coming quarters, but hasn’t provided an exact timeline.

Last year, it began offering wireless service under its Breezeline Mobile brand to customers in 13 U.S. states where it already offered broadband internet services.

Perron says subscriber growth in the U.S. has started ramping up, helping it reduce churn on its wireline business.

Cogeco reported a profit attributable to shareholders of $18.2 million in its second quarter, down from earnings of $24 million during the same period a year earlier.

Stripping out one time costs and benefits, earnings were 46 cents per share. That’s better than the 40 cents per share analysts polled by Zacks Investment Research predicted. 

Shares of Delta Air Lines Inc. rose more than 8%. Citi analysts suggested Delta may be the best airline with which to ride out the uncertainty in coming months for investors who want to maintain exposure to the travel sector.

“Overall, these results show a carrier with a resilient business model, in light of significant uncertainties around demand and the global tariff controversy,” Stephen Trent of Citi Investment Research wrote in a note to clients. 

Still, the sector has been battered this year as investors, anticipating trouble from rising tariffs, put their money elsewhere. Shares are down 41% this year for the nation’s most profitable airline, which is better than rivals American and United. 

Quarterly operating revenue climbed to $14.04 billion from $13.75 billion, beating Wall Street’s estimate of $13.81 billion. 

The average fuel price per gallon declined to $2.47 from $2.79.

Delta cut its first-quarter earnings and revenue outlook last month, saying at the time that a recent decline in consumer and corporate confidence amid growing uncertainty over the economy was weakening domestic demand.

Delta said in March that it expected first-quarter revenue to rise between 3% and 4% compared with a year earlier, down from projections of 7% and 9%.

In January, Delta released fourth-quarter results that topped Wall Street’s profit and revenue estimates, as the company benefited from strong demand during the crucial holiday period.

Yet conditions have deteriorated since then with a burgeoning trade war leaving consumers and businesses unsure about what comes next. Both have begun to pull back on spending, and that includes travel. 

Bastian said Delta foresees June quarter profitability of $1.5 to $2 billion but will not update its full-year outlook “given the lack of economic clarity.” 

The airline previously said that it expected 2025 earnings of more than $7.35 per share and free cash flow of more than $4 billion. At the time the company was expecting strong travel demand to continue, and that has clearly changed. 

A month ago Bastian was confident enough to stick by Delta’s guidance for the year. Speaking at the JPMorgan Industrial Conference, the executive said at the time that Delta was feeling good about where it was at.

“There’s nothing that we’ve been through these last couple of months to indicate there’s any cracks in any of this,” he said. “We anticipate margins continuing to expand and we think margins will expand this year, even with the slower start to the year.”

Yet uncertainty over U.S. trade policy has rattled companies in every economic sector since then. 

Bastian said during Delta’s earnings call on Wednesday that the airline is seeing softness in domestic consumer and business travel given all of the uncertainty. There’s been greater resilience in the international market so far, he added. 

Bastian maintained that given current fuel prices and actions being taken, Delta is “well positioned to deliver solid profitability and meaningful cash flow in 2025.”

For the second quarter, the airline is looking for earnings between $1.70 and $2.30 per share, with total revenue down 2% to up 2%. Analysts surveyed by FactSet predict earnings of $2.21 per share. 

“2025 is playing out differently than we expected at the start of the year,” Delta President Glen Hauenstein said. “As a result, we are adapting to current conditions while staying true to our long-term strategy.”