Indigo says changing consumer habits, cyberattack dragged down earnings

globalnews.ca:

Canadian retailer Indigo Books and Music Inc. said cooling consumer spending compounded the effects of a ransomware attack against the company in February, dragging down its earnings amid a board of directors shakeup.

The Toronto-based bookseller reported a loss of $49.6 million its latest financial year, which saw a cyberattack take down its website and payment systems and compromise the personal information of some current and former employees.

The loss amounted to $1.78 per diluted share for the 52-week period ended April 1 compared with a profit of $3.3 million or 12 cents per diluted share in the same period a year earlier.

Revenue totalled $1.058 billion, down from $1.062 billion in the prior year.

“Like the broader retail market, Indigo continues to feel the impacts of the macroeconomic environment on consumer behaviour and costs, which compounded the headwinds from the ransomware attack,” CEO Peter Ruis said Wednesday during a call with analysts. “People are being more cautious.”

Shoppers are increasingly seeking out deals and promotions, he said.

Indigo achieved record-breaking online sales during Black Friday while Boxing Day week sales were “off the charts,” Ruis said.

But sales in between these bigger retail events have been quieter, creating a rollercoaster effect, he said.

Indigo is continuing to assess the full financial affect of the cyberattack.

“The complete and long-term financial impact of the ransomware attack cannot be reasonably estimated at this time,” Craig Loudon, Indigo’s chief financial officer, said during the call.

“However, it has had a material detrimental impact on the company’s fiscal 2023 financial results,” he said. “The company maintains cyber insurance coverage and is in the process