Indigo offers fresh details on cyberattack as profit slips in latest quarter
Canadian bookstore chain Indigo Books & Music Inc. on Friday provided fresh details about an ongoing cyberattack as the company discussed its bumpy third-quarter results, which saw the company’s profit and sales fall amid slowing consumer demand.
“We have felt the negative impact of inflationary pressures on consumer behavior,” Indigo CEO Peter Ruis said during a call with analysts. “Customers became increasingly price-focused and the tightening of discretionary spending resulted in a value-driven buyer.”
Indigo saw record-breaking sales online on Black Friday and in stores during Boxing Week, he said.
But strong holiday sales were tempered by a decline in customer spending during much of the remainder of the quarter ended Dec. 31, Ruis said.
“The retail industry as a whole is operating in a challenging macroeconomic environment,” he said. “Our teams have worked hard to manage various pressures, including supply chain disruptions, significant increases in fuel prices and higher inventory costs.”
Indigo reported earnings of $34.3 million for the quarter compared to $45.1 million a year earlier, while revenue was $422.7 million compared to $430.7 million for the same period a year ago.
The bookstore has increasingly expanded its range to include gift items, baby items and other wellness and lifestyle products.
Indigo’s printing business showed resilience in the most recent quarter, growing in both revenue and market share compared to pre-pandemic levels but declining slightly compared to the year-ago quarter, 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 continued success of this business underscores the value of the company’s carefully curated assortment and strategic expansion of its core product offering to meet the evolving needs of our consumers.”
Meanwhile, Indigo’s website has been unavailable since Wednesday afternoon. While the retailer can process cash orders in-store, they cannot process electronic payments, accept gift cards, or process returns.
Craig Loudon, Indigo’s chief financial officer, said the cybersecurity incident has disrupted both the company’s internal operations and its e-commerce and retail channels, and it’s unclear whether customer data was accessed.
The company is working with third-party experts to resolve the situation, he said.
“Indigo’s top priorities are protecting customer data, limiting the operational and financial impact of this incident, and safely resuming full operations as soon as possible,” said Loudon.
This report from The Canadian Press was first published on February 10, 2023.
Companies in this story: (TSX:IDG)
Brett Bundale, The Canadian Press