Leon's earnings down 12% in 3Q as sales fall 8.7%
Corporate same-store sales decline 8.1%
Michael Knell -- Furniture Today, November 17, 2009
TORONTO — Sales and earnings fell in the third quarter for Leon's Furniture, which officials attributed to weak consumer confidence.Leon's consolidated sales for the period were C$236.7 million, including C$49.2 million of franchise sales, a decrease of 8.7% from the third quarter of 2008.
Corporate sales were C$187.4 million, off 7.7% from last year. Corporate same-store sales were down 8.1%.
Franchise stores sales were C$49.2 million, off 12.4% from a year earlier.
"The decrease in sales in the third quarter compared to the prior year was the result of a continuation of the general economic slowdown that began in 2008," the company said in a note to shareholders.
Net income was C$15.6 million or 22 cents per share, a decrease of 12% per common share from the C$17.5 million or 25 cents per share in the same period of 2008.
Despite the drop in sales, the company said it will continue its aggressive marketing campaign in support of its 100th anniversary.
During the third quarter, the company opened its first ever downtown Toronto store, called the Roundhouse.
"We are pleased with its performance to date," the company said, adding it will begin construction in the spring on two new stores, a 75,000-square-foot unit in Thunder Bay, Ontario, and an 85,000-square-foot location in Regina, Saskatchewan.
For the nine months ended Sept. 30, Leon's total sales were C$641.8 million, including franchise sales of C$136.6 million. This is a 5.7% decline from the C$680.3 million, including C$146 million in franchise sales, for the comparable period of 2008.
Net income for the nine months was C$32.8 million, down 19.3%. Earnings per share were 46 cents, compared with 57 cents in the 2008 period.
Although the publicly held and family-led full-line retailer expects to maintain its strong financial position, Leon's said it doesn't anticipate a quick return to record growth.
"At this point we do not see any clear signs as to when we will see an economic turnaround," the company said, adding that "growing sales and profits for the balance of this year will be very challenging."
At the end of the quarter, Leon's operated 38 corporate and 28 franchise stores in every Canadian province except British Columbia.
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