BMTC sales down 4.2% as earnings fall 32.5% in second quarter
Michael J. Knell -- Furniture Today, September 6, 2012
MONTREAL — Sales fell and profit plunged in the second quarter for Quebec's dominant full-line furniture and appliance retailer, which BMTC Group attributed to the province's sales tax hike as well as rising unemployment and tighter credit conditions.
BMTC had revenues of C$185.8 million for the quarter, down 4.2% from the same period in 2011. The company hasn't reported a quarterly sales uptick since the second quarter of 2010.
Net earnings were C$13.9 million or 29 cents per share, compared with C$21.5 million or 43 cents per share for the comparable period - a drop of 32.5% on a per share basis.
The company said the current share buyback program added four cents per share to earnings.
For the six months ended June 30, BMTC revenues were C$340.6 million, down 4.7% from the first half of 2011. Net earnings fell to C$12.1 million or 25 cents per share from C$24.3 million or 48 cents per share - a decline of 47.9% on a per share basis.
The company announced that the 10,000-square-foot expansion of its Brault & Martineau store in LaSalle, Quebec, was completed at the end of April. It also opened its 76,000-square-foot replacement for its Ameublements Tanguay store in Lévis, Quebec, in July. The old store will be sold during the third quarter.
BMTC also acquired land in April for a 55,000-square-foot EconoMax store in St-Hubert, Quebec. Construction is expect to begin in October and the store is expected to open sometime early in 2013.
This will be the fifth location for the new banner, which BMTC launched earlier this year as its entry in into promotional price points.
BMTC Chairman, President and CEO Yves Des Groseillers described EconoMax as offering "warehouse prices in a warehouse décor ... in order to offer consumers a variety of more affordable products."
Start-up costs for the new banner were funded out of the company's cash reserves.
At the end of June, BMTC operated 32 stores under the Brault & Martineau, Ameublements Tanguay, EconoMax and Brault & Martineau Sleep Gallery banners. It remains Quebec's largest full-line furniture and appliance retailer and is one of Canada's Top Five big ticket merchants.