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BMTC earning climb thanks to shifts in consumer spending

 18 December 2020     HGO Staff 

MONTREAL – BMTC Group, Quebec’s largest furniture, mattress and major appliance retailer, said earnings for the third quarter and first nine months of its current fiscal year made substantial gains over the comparable period, which was attributed mainly to shifting consumer spending patterns results from restrictions imposed as part of the effort to combat the coronavirus pandemic.

For the three months ending October 31, 2020, BMTC said revenue was $194.4 million, up 6.0% from the $183.3 million for the corresponding period a year ago.

Net earnings were $20.8 million or 61 cents per share, up from $10.6 million or 31 cents per share – an uptick of 96.8% on a per share basis.

On October 27, 2020, BMTC opened two replacement stores in Montreal of Kirkland on land purchased last year along Autoroute 40. One was an 80,000 square foot Brault & Martineau store. Alongside it is a 50,000 square foot EconoMax store, a replace for the banner’s store on Côte-Vertu.

BMTC’s current fiscal year will end on January 31, 2021.

An artist’s rendering of the newly opened Brault & Martineau store in the Montreal suburb of Kirkland. For the nine-month period also ending October 31, 2020, revenues were $470.8 million, a 14.2% drop from the $548.7 million for same period of 2019.

Net earnings were $27.9 million or 82 cents per share, up from $20.7 million or 60 cents per share last year – a jump of 36.7% on a per share basis.

“During the nine-month period ended October 31st, 2020, the company delivered strong operational results, despite the negative financial impact of COVID-19,” BMTC president and chief executive officer Marie-Berthe Des Groseillers said in her report to shareholders.

She noted during the fiscal first quarter, all 32 of BMTC’s stores were closed for 43 consecutive days, causing the company to suffer a revenue drop of about $77 million. During the fiscal second quarter, 15 outlets were closed for 25 consecutive days while another 17 were closed for first five days of the period.

During those lost days, the company focused on online sales, Des Groseillers said, adding they have “experienced a record increase since the start of the pandemic, by actively pursuing the improvement of its digital platforms, its live chat initiative with online customers as well as the improvement of our telephone sales department for all of the BMTC Group Inc. banners.”

However, no dollar figures were provided. Other publicly held Canadian furniture retailers have also reported upticks in online sales with analysts suggesting they now account for between 10% and 18% of their third quarter sales.

Des Groseillers told shareholders digital has become critical to BMTC’s growth and ongoing operations.

“It is also management's opinion that the digital platforms of our banners are essential in order to allow the company to increase its market share as well as to allow customers to start their shopping experience online to then complete their purchases in one of our stores with the help of our sales representatives,” she said., adding “On the other hand, management is aware this increase is also partly due to the fact it has benefited from a transfer of consumer spending related to the restrictions imposed by the various levels of government due to COVID-19 pandemic, more precisely the restrictions related to travel, the closure of restaurants and all forms of entertainment in the cultural and sporting world.”

Des Groseillers also told shareholders the company has had issues with its supply chain since mid-June.

“Many of the company’s suppliers, who have also been affected by the consequences of COVID-19, are unable to honour and deliver placed orders,” she said. “This problem seems widespread in our industry and is not unique to the company. Therefore, it is possible that this could have a negative impact on future results because orders on hand may not be able to be delivered due to this shortcoming.”

She also noted company performance could be negatively impacted by increasing levels of unemployment in Quebec, which could add to household debt in that province and inhibit consumer spending in the near future.

“It is difficult to predict the future level of consumer confidence and the possible impact on sales of BMTC Group,” she said. “Management is confident that the company’s operational efficiency during this crisis, its market leadership and solid financial position will allow us to emerge a stronger organization despite these difficult market conditions and maintain its objectives increasing its market share and profitability in Quebec.”

At the end of October, BMTC operated some 32 stores throughout Quebec under three banners including Brault & Martineau, EconoMax and Ameublements Tanguay.

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