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Brick Q1 profit jumps 318% PDF Print E-mail
Written by Michael J. Knell   

EDMONTON, Alberta (09 May 2012) - The Brick reported net income for the first quarter grew a rocket-fuelled 318%, which was primarily attributed to a shift in its sales mix from appliances and consumer electronics to the higher margin furniture and mattress categories.

For the three months ending March 31, 2012, the Brick Group said its "total system" or consolidated revenue totaled $337.9 million, a gain of 1.8% over the $332.1 million in the first quarter of 2011, as same store sales advanced 2.2%.

However, sales by its 168 corporate stores were $295.8 million, a marginal gain of 0.8% over the comparable period. Same store sales for this network were up 1.9%.

As has been the case for the past few years, the Brick's 62-unit franchise network were its star performers as first quarter sales leaped 9.2% to $42.1 million. Same store sales were up 3.8%.

Net income was $4.7 million a 318% gain over the $1.1 million earned in the first quarter of 2011. Diluted earnings per share jumped from one cent to four cents as the number of shares contracted from 137.3 million in first quarter of 2011 to 130.1 million.

The Brick noted that gross margin increased 80 basis points in the first quarter to 45.2% as sales by its retail segment - which is product on the floor - saw and uptick of 1.4% to $276.1 million.

Meanwhile, sales by its financial service segment - which sells everything from financing to extended warranties and other added-value services - fell 6.7% to $19.7 million.

"We are pleased with our first quarter financial results," Vi Konkle, president and chief executive officer of the Brick Group, said in a statement. "In addition to solid sales performance, the Brick team delivered strong gross margin results resulting in an increase of $3.4 million or 2.6% over 2011. Similar to 2011 results, our product mix has been a significant contributor to our margin performance, shifting sales towards our higher margin mattress and furniture categories."

During the first quarter, the Brick acquired Pacific Wholesale Appliance, a Vancouver-based distributor selling white goods to builders and developers in the lower mainland of British Columbia.

It also converted its corporate stores in Camrose, Alberta and Terrace, British Columbia, to franchise stores. The company closed one other corporate store and one Brick Mattress outlet.

Over the next nine months, the Brick intends to close two additional corporate stores as well as four units operating under the United Furniture Warehouse banner. It will also open nine new franchise units.

At the end of 2012, the Brick is anticipating a store count of 233, including 71 franchise stores. As of December 31, 2011, the company operated 232 stores, including 60 franchises.

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