GROUPE DYNAMITE RAISES GUIDANCE ON EXCEPTIONAL Q2 PERFORMANCE

Executive Summary

• Groupe Dynamite reported exceptional Q2 2025 financial results, driven by a 28.6% increase in comparable store sales and strong operational execution.
• The company raised its full-year Fiscal 2025 guidance, increasing the comparable store sales growth forecast from 7.5%-9.0% to 17.0%-19.0% and the adjusted EBITDA margin forecast from 30.3%-32.3% to 32.0%-33.5%.
• Revenue surged 36.5% to $326.4 million, while adjusted EBITDA grew 49.1% to $120.5 million, reflecting significant operating leverage and improved cost management despite tariff headwinds.

Key Details

• Q2 2025 Financial Performance:
  • Revenue: $326.4 million (up 36.5% from $239.1 million in Q2 2024).
  • Comparable Store Sales Growth: 28.6% (25.7% constant currency), compared to 14.7% in Q2 2024.
  • Gross Profit: $207.5 million; Gross Margin: 63.6% (down 240 bps from 66.0% in Q2 2024, impacted by tariffs).
  • Operating Income: $97.3 million (up 61.4% from $60.3 million).
  • Adjusted EBITDA: $120.5 million (up 49.1% from $80.8 million); Adjusted EBITDA Margin: 36.9% (vs 33.8% in Q2 2024).
  • Net Earnings: $63.9 million; Diluted Net EPS: $0.56 (vs $0.38 in Q2 2024).
  • Adjusted Diluted Net EPS: $0.57 (up 43.4% from $0.40).
  • Free Cash Flow: $72.6 million (up from $29.6 million in Q2 2024).
• Operational Metrics:
  • Retail Sales per Square Foot: $820 (up 18.1% from $694).
  • SG&A as % of Sales: 26.9% (down from 33.4%); Adjusted SG&A as % of Sales: 26.7% (down 550 bps from 32.2%).
  • Inventory Turnover: 7.25x (improved from 6.12x).
  • Net Leverage Ratio: 0.79x (improved from 1.59x); Total debt repaid, leaving $151.2 million in cash.
  • Return on Assets (ROA): 24.1%; Return on Capital Employed (ROCE): 45.0%.
• Store Activity:
  • Opened 8 gross new stores in the US under the Garage banner.
  • Closed 6 stores in Canada (4 Dynamite, 2 Garage).
  • Renovated or relocated 4 stores (2 US Garage, 2 Canada).
  • Total store count: 299.
• Capital Allocation:
  • Repurchased 355,300 shares at an average price of $19.70 for approximately $7.0 million.
• Fiscal 2025 Guidance Raised:
  • Comparable Store Sales Growth: Raised to 17.0% - 19.0% (from 7.5% - 9.0%).
  • Adjusted EBITDA Margin: Raised to 32.0% - 33.5% (from 30.3% - 32.3%).
  • Net New Store Openings: 8 to 9 (down from 9 to 10).
  • CAPEX: $95.0 million - $105.0 million (unchanged).
• International Expansion:
  • Signed 5 new leases for UK expansion.
  • North American openings are outperforming expectations.

Notable Quotes

• "We delivered an exceptional quarter. Comparable store sales grew 28.6%, driving a 43.3% two-year stack. This performance was fueled largely by higher traffic, attributable to strong brand heat and an important increase in media brand impressions. We've raised our 2025 guidance on both revenue and profitability, reflecting disciplined execution, operational agility and a luxury-inspired model that consistently outperforms." — Andrew Lutfy, Chief Executive Officer and Chair of the Board
• "This quarter, our teams executed with precision and delivered strong results. North American openings are exceeding expectations, and our UK expansion is progressing with five new leases signed. Every function of the business, from product to marketing to our store teams, is aligned and driving performance." — Stacie Beaver, President and Chief Operating Officer