BMTC Group's sales, earnings decline in third quarter

Michael J. Knell -- Furniture Today, November 29, 2011

MONTREAL — BMTC Group reported an 8% sales decline in the third quarter, which it attributed to an increasingly difficult economic environment in Quebec. It was the fifth straight quarter during which Quebec's largest full-line furniture and appliance retailer reported declining sales.

Sales of C$196.7 million in the period down 8% from the C$215.7 million for the same period last year.

Net earnings of C$17.9 million or 33 cents per share were down 16% from compared to C$21.4 million or 36 cents per share a year earlier.

The company said its ongoing share repurchase program adding 2 cents per share to net earnings while the costs of options reduced earnings by 2 cents a share, compared to a decrease of 13 cents per share for the corresponding 2010 period.

BMTC costs options paid to senior management as either an expense or revenue in its net earnings calculation. An increase in the company's share price incurs an expense, with a decrease incurs revenue.

For the nine month period ended Sept. 30, revenue of C$554 was down 8% from the comparable 2010 period.

Net earnings were essentially unchanged at C$42.1 million, although earnings per share increased to 84 cents per share from 81 cents. The cost of options reduced earnings by 6 cents a share, compared with a decrease of 28 cents a year earlier, while the share repurchase program added 4 cents.

This year, BMTC has completed the renovation of the last three appliance departments in its Brault & Martineau stores. And after breaking ground in May, the company expects to open its new Ameublesment Tanguay store in Lévis, Quebec, in early 2012.

In a note to shareholders, BMTC Chairman, President and CEO Yves Des Groseillers said he doesn't foresee any immediate improvements in the retail market.

"The weakness recorded at the end of 2010 intensified during the first three quarters of 2011 and we do not anticipate better results for the next quarter," he said. "The tightening of credit as well as the increase of the Quebec sales tax does not favor domestic and household consumption."

However, the company owns almost all of the real estate it occupies, has no debt and C$114 million in cash and securities, and an untapped line of credit valued at C$20 million. This should BMTC to weather the upheaval, officials said.

At the end of September, the company operated some 32 stores in Quebec under its Brault & Martineau and Ameublesment Tanguay banners.