Birks Group announces sales growth and net income for fiscal 2017

MONTREAL, June 23, 2017

Jean-Christophe Bédos, President and Chief Executive Officer of Birks Group, commented "Our fiscal 2017 results are reflective of our resiliency as a Company to adapt in a constantly changing and very challenging retail environment in North America. Despite current retail conditions in Canada, our sales grew by $1.1 million over last year. We posted net earnings of $4.9 million due to a strong performance in the US, in line with our fiscal 2016 net earnings of $5.4 million. Our continued successes are attributable to our dedication to enhancing customer experiences through our new store designs, our new collections and our creative marketing campaigns. Management is focused on growing the Birks brand through a consumer-centric approach involving creative marketing and the launch of new jewelry collections. We believe that the execution of our strategies will allow the Company to achieve its objectives in fiscal 2018."

Fiscal 2017 Financial Overview:

• Net sales were $286.9 million for fiscal 2017, an increase of $1.1 million compared to net sales of $285.8 million in fiscal year ended March 26, 2016 ("fiscal 2016"). Net sales were $3.6 million higher than last year on a constant currency basis (see "Non-GAAP measures") after excluding $2.5 million of lower sales due to the translation of the Company's Canadian sales into U.S. dollars with a weaker Canadian dollar;
  
  
• Comparable store sales and comparable store sales calculated on a constant exchange rate basis (see "Non-GAAP measures") both increased by 1% compared to the prior fiscal year ended March 26, 2016;
  
  
• The comparable store sales increase of 1% reflects a 9% comparable store sales increase in the U.S., mainly driven by higher timepiece sales reflecting the success of our strategy to introduce new watch brands while expanding our offering of select watch and fine jewelry brands, offset by an 8% decrease in comparable store sales in Canada, primarily driven by difficult economic conditions in Western Canada and decreased spending by certain affluent tourists;
  
  
• Gross profit was $108.4 million, or 37.8% of net sales, for fiscal 2017, compared to $109.4 million, or 38.3% of net sales, for fiscal 2016. The reduction of 50 basis points in gross margin percentage is mainly due to product sales mix and the impact of foreign exchange;
  
  
• Selling, general and administrative expenses were $94.2 million, or 32.8% of net sales, in fiscal 2017 compared to $91.1 million, or 31.9% of net sales, in fiscal 2016. The increase is mainly due to additional direct variable costs driven by higher U.S. sales and due to the increased use of in-house credit plans that attracted new customers during fiscal 2017, partially offset by the efficiencies that resulted from the operational restructuring plan that was initiated in fiscal 2015;
  
  
• The Company's fiscal 2017 reported operating income was $8.3 million, a decrease of $7.2 million compared to $15.5 million in fiscal 2016. Adjusted operating income (see "Non-GAAP measures"), which excludes restructuring costs, was $9.2 million, a decrease of $3.8 million compared to $13.0 million in fiscal 2016 (excluding restructuring costs and gain on sale of assets); and
  
  
• Net income for fiscal 2017 was $4.9 million, or $0.27 per share, compared to net income of $5.4 million, or $0.30 per share in fiscal 2016. Excluding the impact of $0.8 million of restructuring charges recorded during fiscal 2017, the Company's net income for fiscal 2017 was $5.7 million, or $0.32 per share, compared to a net income of $3.0 million, or $0.17 per share, for fiscal 2016 after excluding the $0.8 million restructuring charges and the $3.2 million of gain on sale of assets.

About Birks Group Inc.

Birks Group is a leading operator of luxury jewelry stores in Canada and Southeastern United States. As of May 31, 2017, the Company operated 26 stores under the Birks brand in most major metropolitan markets in Canada, 17 stores in Florida and Georgia under the Mayors brand, one store under the Rolex brand name and two retail locations in Calgary and Vancouver under the Brinkhaus brand. Birks was founded in 1879 and developed over the years into Canada's premier retailer and designer of fine jewelry, timepieces and gifts. Mayors was founded in 1910 and has maintained the intimacy of a family-owned boutique while becoming renowned for its fine jewelry, timepieces and service. Additional information can be found on Birks Group web site, www.birksgroup.com.

NON-GAAP MEASURES

The Company reports information in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"). The Company's performance is monitored and evaluated using various sales and earnings measures that are adjusted to include or exclude amounts from the most directly comparable GAAP measure ("non-GAAP measures"). The Company presents such non-GAAP measures in reporting its financial results to investors and other external stakeholders to provide them with useful complimentary information which will allow them to evaluate the Company's operating results using the same financial measures and metrics used by the Company in evaluating performance. The Company does not, nor does it suggest that investors and other external stakeholders should, consider non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. These non-GAAP measures may not be comparable to similarly-titled measures presented by other companies.