Leon's posts 18% increase in total sales

Income rises 14.3% in second quarter

Michael Knell -- Furniture Today, August 20, 2008

TORONTO - Driven by a 4.8% uptick in same-store sales and its January acquisition of Appliance Canada, Leon's Furniture Ltd. posted an 18% increase in total sales and a 14.3% increase in net income in the second quarter ended June 30.

The furniture, appliance and home electronics retailer, with 35 corporate and 29 franchise stores across Canada, said total sales in the quarter came to C$224.7 million, including C$48 million in franchise sales, compared with C$190.4 million -- C$43.4 million from franchises -- in last year's second quarter.

Net income was C$11.6 million, or 16 cents per common share, compared with C$9.9 million, or 14 cents per share, in the comparable 2007 quarter.

The company said sales at corporately owned stores rose 20.2% in the latest quarter compared with last year. Franchise sales were up 10.4%.

"In the second quarter, we saw good sales growth compared to the prior year," Leon's said in a news release. "Although our sales continue to be strong, we are concerned about a general slowdown in the economy."

Among its franchises, Leon's cited strong sales growth in eastern and central Canada, with flat sales in western Canada, compared to last year's second quarter.

For the six months, total Leon's sales were up 13.7% to C$421.1 million -- C$89.8 million in franchise sales -- compared to 2007's first half, while net income rose 10.3% to C$22.7 million, or 32 cents per share.

The chain said renovations have been completed at its Ontario stores in Nepean and London, which have begun grand re-openings. Renovations have begun at the Mississauga, Ontario, store, with completion expected by year's end. Another renovation is under way at the Laval, Quebec, showroom and warehouse, with completion set for spring 2009.

Work also is continuing on a new downtown Toronto store known as the "Roundhouse," with a grand opening anticipated in early 2009, the company said.