Leon's sales up 10.7% in '04
By Michael J. Knell -- Furniture Today, March 13, 2005
Toronto — Aggressive merchandising and advertising helped give major retailer Leon's Furniture a 10.7% gain in sales last year to C$504.6 million.
Earnings jumped even more, by 19.9% to C$46.1 million or C$2.41 per common share. Same-store sales were up 7.5% over 2003.
Including C$165.3 million in sales by Leon's franchise stores, total revenues for 2004 came to C$669.8 million, up 13.7%. Franchise network sales in 2003 were C$133.4 million.
Fourth-quarter corporate sales were up 11.8% to C$153.1 million, and net income rose 6.2% to C$17.1 million or 90 Canadian cents per share.
"Overall, we are very proud to report that Leon's Furniture Ltd. achieved record sales and profits in each quarter of 2004 and the year," said Chairman Anthony T. Leon. "This was accomplished by way of a more aggressive approach to merchandising and advertising, coupled with a conservative approach to controlling expenses."
In the fourth quarter, the publicly held and family managed retailer opened two corporately owned warehouse showrooms, one in Edmonton South, Alberta, and the other in Quebec City.
In 2005, Leon's expects that renovations will be completed at its Windsor, Ontario, store and started in the Kitchener, Ontario, and Halifax, Nova Scotia, stores. A new corporate warehouse and showroom in Hamilton, Ontario, is expected to open by summer. Construction will begin this spring on two warehouse showrooms in Woodbridge, Ontario, and Saskatoon, Saskatchewan.
"We are scheduling to open these new stores towards the end of 2005," Leon said.
President and CEO Terry Leon said he doesn't expect this to be an easy year for retailers.
"2005 is going to be a tougher year than 2004 in Canada," he said. "The (stronger Canadian) dollar is going to make it tough for all manufacturers and that's going to affect all of us. General economic conditions won't be as strong and a lot of costs — labor, utilities, construction — that we don't have much control over are going up."
At the end of 2004, Leon's had 30 corporate stores and 27 franchise stores in every province except British Columbia.
Leon's, 65% held by the Leon family, is Canada's fourth-largest furniture and bedding merchant. These categories account for about 75% of sales.
| Leon's(a) | |||
|---|---|---|---|
| Earnings per share are fully diluted. | |||
| Quarter ended 12/31 | 2004 | 2003 | Change |
| (a) In Canadian dollars. (b) Based on average shares outstanding of 19 million in the 2004 quarter, 19.6 million in the 2003 quarter, 19.1 million in the 2004 year and 20 million in the 2003 year. | |||
| Sales | C$153,080,000 | C$136,865,000 | 11.8% |
| Operating income | 28,128,000 | 26,992,000 | 4.2% |
| Net income | 17,090,000 | 16,099,000 | 6.2% |
| Earnings per share (b) | 0.90 | 0.82 | 9.8% |
| Year ended 12/31 | 2004 | 2003 | Change |
| Sales | C$504,591,000 | C$455,702,000 | 10.7% |
| Operating income | 78,066,000 | 66,843,000 | 16.8% |
| Net income | 46,104,000 | 38,438,000 | 19.9% |
| Earnings per share (b) | 2.41 | 1.92 | 25.5% |
Leon's profit declines 25.8%
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03/13/2005
