Leon's 3Q sales, profits rise
By Furniture Today Staff -- Furniture Today, December 7, 2003
Toronto — Leon's Furniture, Canada's second-largest furniture and bedding retailer, said third-quarter sales rose 5.3% to C$121.3 million, as net income grew 10.2% to C$11.5 million.
For the nine months, sales advanced 2.5% to C$319.2 million, while net income fell 7.2% to C$22.6 million.
Including sales generated by Leon's 23 franchise stores, the full-line retailer had total revenues for the first nine months of C$414 million, up 3.2% from C$401 million in last year's comparable period.
"Although the retail environment continues to be difficult, we were able to increase both sales and profits in the third quarter," said Chairman Anthony T. Leon, attributing the gains to "a determined effort to improve sales and better manage costs."
During the quarter, Leon's opened its first corporately owned franchise store in Sarnia, Ontario. Leon's owns the building, which is leased to the franchisee.
For the first time in several years, the company will forge ahead with an aggressive expansion of its franchise network, opening new stores in Lethbridge, Alberta; Woodstock, Ontario; and Gander, Newfoundland in the fourth quarter. This will bring the total number of franchises to 26.
Renovations of corporate stores in Ottawa and Burlington, Ontario, will be completed before year's end, and Leon said the company has purchased property for new stores in Hamilton, Ontario; South Edmonton, Alberta; and Quebec City.
"Construction at these locations will begin this year, with openings set between late summer and fall of next year," he said.
All the projects are being financed internally. Leon's said it held cash, cash equivalents and market securities valued at C$94.9 million on Sept. 30, 2003.
In the works for 2005 are new stores in metro Toronto; Saskatoon, Saskatchewan; and Halifax, Nova Scotia.
"Although retailing in general is likely to continue to be difficult, we remain optimistic about the future," Leon said. "We are maintaining our vigilance in controlling expenses and improving efficiencies. On the other hand, we plan even more aggressive merchandising and marketing strategies to improve our position in the marketplace.
"The remainder of 2003 will require a strong and sustained effort on our part to increase sales and profits," he continued. "To better meet these challenges we are implementing new development and training programs for our associates."
| Leon's(a) | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are loses or declines. | |||
| Quarter ended 9/3020032002Change | |||
| (a) In Canadian dollars. |
|||
| Sales | C$121,274,000 | C$115,152,000 | 5.3% |
| Operating income | 19,706,000 | 18,558,000 | 6.2% |
| Net income | 11,532,000 | 10,461,000 | 10.2% |
| Earnings per share | 0.57 | 0.53 | 7.5% |
| 9 months ended 9/30 | 2003 | 2002 | Change |
| Sales | C$319,198,000 | C$311,346,000 | 2.5% |
| Operating income | 40,212,000 | 44,548,000 | (9.7%) |
| Net income | 22,568,000 | 24,307,000 | (7.2%) |
| Earnings per share | 1.12 | 1.22 | (8.2%) |
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