BMTC sales fall 18%

MONTREAL – In what is becoming a familiar refrain among retailers large and small, publicly held or otherwise, Quebec’s largest full-line furniture retailer, BMTC Group, reported a downturn in both sales and earnings for the third quarter of its current fiscal year, which it attributed to the malaise that seems to be taking hold through much of the economy in Canada.

For the three months ending October 31, 2022, BMTC revenues fell 18% to $175.6 million, compared to $214.0 million for the same period a year earlier.

Net earnings amounted to $13.8 million or 42 cents per share, compared to $20.2 million or 60 cents per share – a 30% decrease on a per share basis.

The company noted its share repurchase scheme contributed one cent per share to net earnings, while it added nothing to net earnings for the previous year.

It should be noted BMTC Group’s fiscal year ends on January 31.

For the nine months also ending October 31, 2022, revenue was $570.2 million, down 8.5% from the $622.8 million for the same period last year.

Net earnings were $28.9 million or 87 cents per share, compared to $59.4 million or $1.76 per share – a drop of 50.6% on a per share basis.

The share repurchase program contributed two cents per share to net earnings, twice the one cent per share for the comparable period. Funds received from the Canadian Emergency Wage Subsidy (CEWS) added four cents per share to the prior period’s earnings as well.

In its report to shareholders, BMTC announced it has entered into an agreement to sell its distribution centre in Montreal for $66.5 million, which will result in an after-tax gain of $51 million. The company will lease back the facility for at least two years, with an option to renew. The deal is expected to close next February.

Marie-Berthe Des Groseillers, president and chief executive officer, also cautioned shareholders a return to rapid growth in sales and earnings during the COVID-19 pandemic isn’t likely.

“It is difficult to predict the future level of consumer spending, although we are now seeing that the company’s results in the last quarter are not reflecting the performance of the last two years,” she admitted. “This downward trend continued in subsequent months. We can, therefore, expect a significant drop, around 20% if the trend continues.

“This is partly explained by the high rate of inflation in terms of the cost of food, the cost of gas and the rise in interest rates, which has a direct impact on consumer spending,” she continued, adding management is aware much of the sales uptick over the past two years was due, at least in part, to government restrictions that kept consumers at home as part of the fight against COVID-19. They focused on making home more comfortable because they couldn’t travel or go to movies or eat in restaurants.

At the end of October 2023, BMTC Group operated some 30 stores across the province of Quebec under three banners: Brault & Martineau, EconoMax and Ameublements Tanguay.

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