Tough Canadian economy leads to flat second quarter at Leon's
By Furniture Today Staff -- Furniture Today, September 3, 2001
TORONTO — Leon's Furniture said second-quarter sales rose 2% to C$93.3 million while net income dropped 7.3% to C$6.2 million.
"The economic climate continued to be difficult," said Anthony T. Leon, chairman of Canada's third-largest furniture retailer. "Our same-store sales numbers were basically flat during the quarter. We believe that our merchandising and marketing adjustments prevented even further degradation of revenue growth."
Terry Leon, senior vice president and chief financial officer, said the company's overall financial health remains excellent. "Our return on sales consistently averages 13% to 15%," he said. "In relation to the rest of the market, we're doing fairly well."
For the six months, Leon's reported sales of C$179.5 million, an increase of 4% over the previous year. Net income remained essentially flat at C$11.6 million.
If sales of the company's 23 franchise stores are included, sales total for the first half were C$231 million compared to C$225 million in 2000.
Leon's has renovated its metro Toronto flagship store and opened a store in Red Deer, Alberta, both without borrowing. At the end of the second quarter, the company held marketable securities and cash assets valued at C$68.8 million.
"We view difficult economic times as opportunities to increase our market share," Anthony Leon said. "We hope to take advantage of these opportunities in the second half."
Leon's expects to open a warehouse showroom in Niagara-on-the-Lake, Ontario, in the fourth quarter.
The company has received approval to acquire an additional 980,000 of its common shares, about 5% of shares outstanding.
| Leon's(a) | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 6/30 | 2001 | 2000 | Change |
| (a) In Canadian dollars. | |||
| Sales | C$93,302,000 | C$91,503,000 | 2.0% |
| Operating income | 11,610,000 | 12,460,000 | (6.8%) |
| Net income | 6,230,000 | 6,717,000 | (7.3%) |
| Earnings per share | 0.31 | 0.32 | (3.1%) |
| 6 months ended 6/30 | 2001 | 2000 | Change |
| Sales | C$179,514,000 | C$172,574,000 | 4.0% |
| Operating income | 21,611,000 | 21,350,000 | 1.2% |
| Net income | 11,642,000 | 11,486,000 | 1.4% |
| Earnings per share | 0.58 | 0.55 | 5.5% |
