Roots (ROOT) investor relations material

Executive summary

• Q4 2025 sales reached CAD 115.5 million (USD 115.5M), up 4.2% year-over-year, with DTC comparable sales up 7.3% and 14.8% on a two-year stack basis.

• Full year revenue was CAD 277.7 million (USD 277.7M), up 5.6%, with DTC comparable sales growth of 9.5%.

• Net income for the year was CAD 4.7 million, reversing a net loss of CAD 33.4 million in fiscal 2024; Q4 net income was CAD 14.7 million, compared to a net loss of CAD 21.7 million in Q4 2024.

• Net debt reduced 42% year-over-year to CAD 4.3 million, with a leverage ratio below 0.2x trailing 12-month adjusted EBITDA.

• Board initiated a strategic review to maximize shareholder value in March, with no further commentary until a decision is made.

Financial highlights

• Q4 gross profit was CAD 71.4 million, up 5.1% year-over-year; gross margin reached 61.8%, up 50bps.

• Full year gross profit was CAD 170.2 million, up 8.3%; record gross margin of 61.3%, up 150bps.

• Q4 Adjusted EBITDA was CAD 25.1 million; full year Adjusted EBITDA rose 9.5% to CAD 23.3 million.

• Q4 Adjusted Net Income was CAD 16.3 million; full year Adjusted Net Income increased 40.1% to CAD 8.4 million.

• Free cash flow for Q4 was CAD 40.8 million, up 3.5%; full year free cash flow was CAD 7.5 million.

Outlook and guidance

• Focus remains on strengthening core franchises, expanding into complementary categories, and enhancing omni-channel experience.

• Marketing spend will be reduced in 2026, with a more targeted and efficient allocation based on 2025 learnings.

• Continued investment in AI, data infrastructure, and supply chain to drive operational excellence and scalability.

• Transition to a new distribution center in Ontario expected to complete by July 2026.

• Monitoring macro and trade environment closely, with a disciplined approach to capital allocation and risk mitigation.