Leon's revenues up 16%
By Michael J. Knell -- Furniture Today, May 21, 2007
Toronto — Leon's Furniture said revenues for the first quarter advanced 16% from the same period last year, the result of its continuing focus on increasing its market share.
Corporate sales of C$138.7 million were up 15.6%. Including C$41 million in sales at Leon's 28 franchise stores, the total stood at C$179.8 million for the quarter, up 16%.
Net income was C$10.8 million, an increase of 10.7% from last year's first quarter. Included in the 2007 results was an after-tax gain of C$288,000 or 1.6 cents per share on the sale of land and buildings.
Leon's said its gross margins for the quarter fell just over half a percentage point to 42%.
"In order to help drive sales, slightly more favorable pricing was passed on to the consumer as well as a slight change in product mix," the company said.
"Overall we are pleased that we were able to improve our financial results in the first quarter of 2007," Chairman Mark Leon said in a statement. "Our strong sales increase has encouraged us to continue on focusing on increasing market share in existing and new markets going forward."
During the first quarter, Leon's opened a corporate showroom and warehouse in the Toronto suburb of Newmarket. The publicly held and family-managed retailer plans to open a corporate store in the Montreal suburb of Longueuil, Quebec, this fall and will renovate stores in Calgary, Alberta, and Kitchener, Ontario.
Sales should continue to improve, the company said.
"We are continuing to experience a stable retail environment and we feel confident, under these conditions, in our ability to continue to increase sales for the balance of the year, although we do not expect them to increase at the same pace as the first quarter 2007," Mark Leon said. "We are still facing challenges on the operations side of our business including increases in cost of labor, fuel, utilities, land and construction.
"However, the consistent decline in the selling price of our products is beginning to level off, which should allow us to better plan for the returns necessary to offset the increased costs of doing business," he added.
| Leon's(a) | |||
|---|---|---|---|
| Earnings per share are fully diluted. | |||
| Quarter ended 3/31 | 2007 | 2006 | Change |
| (a) In Canadian dollars. (b) Includes pretax gains on sale of capital property of C$443,000 in the 2007 period and C$2 million in the 2006 period. | |||
| Sales | C$138,743,000 | C$120,018,000 | 15.6% |
| Operating income | 24,624,000 | 21,154,000 | 16.4% |
| Net income (b) | 10,793,000 | 9,752,000 | 10.7% |
| Earnings per share | 0.59 | 0.53 | 11.3% |
