Canadian bookstore chain Indigo Books & Music Inc. offered fresh details about an ongoing cyberattack on Friday as the company discussed its rocky third-quarter results, which saw the company's profit and sales slip amid softening consumer demand.
“We felt the adverse impact of inflationary pressures on consumer behaviour,” Indigo CEO Peter Ruis said during a call with analysts. “Customers were increasingly focused on price and the tightening of discretionary spending was yielding a more value-oriented shopper.”
Indigo posted record-breaking sales online on Black Friday and in-store during Boxing Week, he said.
But strong holiday sales were tempered by a pullback in customer spending during much of the rest of the quarter ended Dec. 31, Ruis said.
“The retail industry on a whole is operating in a challenging macroeconomic environment,” he said. “Our teams have been working hard to manage various pressures including supply chain disruptions, significant increases in fuel prices and higher costs of inventory.”
Indigo reported a profit of $34.3 million for the quarter, down from $45.1 million a year earlier, while revenue was $422.7 million, down from $430.7 million in the same period a year ago.
The bookstore has increasingly added gifts, baby items and other wellness and lifestyle products to its product assortment.
Indigo's print business showed resilience in the latest quarter, growing in both sales and market share compared with pre-pandemic levels but down slightly compared with the same quarter last year, Ruis said.
The company's general merchandise business “delivered another strong quarter led by double-digit growth in the baby, toys and wellness categories,” he said.
“The ongoing success of this business underlines the value of the company's carefully selected assortment and the strategic expansion of core product offerings to meet the evolving needs of our consumers.”
Meanwhile, Indigo's website has been down since Wednesday afternoon. While the retailer can process in-store orders paid in cash, it cannot process electronic payments, accept gift cards or handle returns.
Craig Loudon, Indigo's chief financial officer, said the cybersecurity incident has resulted in disruptions to both internal operations and the company's e-commerce and retail channels and that it is unclear whether customer data has been accessed.
The company is working alongside third-party experts to resolve the situation, he said.
“Indigo's main priorities are to protect customer data, limit the operational and financial impacts of this incident and safely resume full operations as quickly as possible,” Loudon said.
This report by The Canadian Press was first published Feb. 10, 2023.
