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Stock in Indigo Books drops 18% as retailer posts $10.1M loss, low book sales

The Canadian Press
An Indigo Books and Music store is seen on Sainte Catherine Street in downtown Montreal, February 8, 2011. Canada's biggest book retailer will report their third quarter results on Tuesday. REUTERS/Shaun Best

By The Canadian Press

TORONTO - Indigo Books and Music Inc. shares plunged to their lowest price in more than a year Wednesday, a day after the national retailer reported a $10-million loss and announced plans to suspend its dividend.

Indigo said it will make one more dividend payment then suspend the payout to shareholders due to a period of major store renovations, product development and increased digital investment "to fully bring to life its book lovers lifestyle store concept."

On the Toronto Stock Exchange, Indigo (TSX:IDG.TO - News) traded as low as $8.50. The shares recovered somewhat but were down more than 18 per cent at $8.75 at the close, well below the previous 52-week low of $9.06.

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Indigo announced after markets closed Tuesday that it will pay a quarterly dividend of 11 cents per common share on Dec. 3 but then suspend the payout to shareholders.

Canada's largest book retailer had a net loss of $10.1 million, or 39 cents per share, for the 13-week period ended Sept. 28. This compared with a net loss of $4 million, or 16 cents per share, for the same period in 2012.

Revenues for the second quarter declined by 3.3 per cent to $179 million, compared with $186 million in last year's second quarter.