Groupe Dynamite (GRGD) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered 20% revenue growth to $226.7M and 13% comparable store sales growth, building on last year’s 16% comp growth, with strong digital and in-store performance.

• Retail sales per square foot increased 16% to $756, and e-commerce revenue grew 20% year-over-year.

• Garage celebrated its 50th anniversary, launched the inaugural ESG report, and introduced the Shared Success employee ownership program.

• Strategic focus included omnichannel growth, U.S. and international expansion, and optimizing store portfolio for high-tier locations.

• Opened 1 new store, closed 2, and relocated 3 during the quarter, with continued momentum into Q2 and a robust outlook.

Financial highlights

• Gross profit rose 16.6% to $140.7M, with gross margin at 62.1%, down 180 bps due to tariffs.

• Adjusted EBITDA increased 19.8% to $66.8M, with margin stable at 29.5%.

• Net earnings reached $27.3M, up from $23.9M; adjusted net earnings up 14.5% to $28.4M.

• Free cash flow grew 13.8% to $41.6M; cash balance over $106M and $312M available credit.

• Return on assets rose to 23.8% and return on capital employed to 44.5%.

Outlook and guidance

• Full-year comparable store sales growth guidance raised to 7.5%-9% (from 5%-6.5%) due to strong YTD performance.

• Adjusted EBITDA margin guidance unchanged at 30.3%-32.3% of sales; CAPEX guidance $95–$105M for FY25.

• 18–20 new store openings planned (9–10 net new stores), with long-term target of ~350 stores by FY28 and ~25% e-commerce penetration.

• Q2 expected to be most challenging for gross margin due to elevated tariffs, but margin expected to improve in Q3 as new U.S. DC comes online.

• Incremental public company costs expected to impact adjusted EBITDA margin by 40 bps.