E-commerce, corporate store sales climb in 2019, LFL reports
TORONTO – Leon’s Furniture Limited (LFL) reported higher e-commerce and corporate store sales for both the third quarter and the first nine months of 2019, although net income declined. However, recent investments in infrastructure, including three new stores, should bolster top and bottom line prospects for this country’s largest full-line furniture retailer over the coming months.
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Total system sales for the three months ending 30 September 2019 were $712.5 million, up 0.8% from the $707.0 million recorded for the same period last year.
Corporate store sales were pegged at $601.3 million, up 1.5% from $592.3 million. Same store sales edged up 0.6% year-over-year.
Franchise store sales were $111.2 million, falling 3.1% from $114.7 million a year ago.
Net income for the period was $33.0 million or 40 cents per diluted share, compared to $33.7 million or 41 cents per diluted share – a drop of 2.4% on a per share basis.
LFL opened three new stores in the quarter, including a Brick franchise store in Meadow Lake, Saskatchewan and two corporate stores – a new Brick flagship in the West Edmonton Mall and a Leon’s smart store in Coldbrook, Nova Scotia. It also said it has achieved double digit growth in the quarter from its e-commerce platforms and has generated sales of more than $100 million over the past 12 months.
“In the quarter, both retail banners continued the refresh of their store network, exemplified with the Brick’s 50,000 square foot West Edmonton Mall location, which re-opened in early September,” LFL president and chief executive officer Edward Leon said in a statement. “The Leon’s banner opened another 30,000 square foot Smart Store in Coldbrook, Nova Scotia. This concept is an example of one of the opportunities we see developing over the next several years, both to optimize existing locations and drive value from the additional space, as well as looking at selective new greenfield locations in urban markets.
“Both of these new store concepts feature immersive technology, including features such as: digital availability and browsing of the banner's full range of products; video walls enabling customers to view selected products in full size; and augmented reality to help with room planning,” he added.
LFL also said net debt totaled $20.3 million at 30 September 2019, compared to $76.3 million a year earlier. “Since acquiring The Brick Ltd. in 2013, over $365 million in total debt has been repaid,” the company said.
For the nine months also ending 30 September 2019, total system sales were $1.98 billion, up 0.8% from $1.96 billion for the same period last year.
Corporate store sales were $1.66 billion, up 1.4% from the $1.64 billion for the comparable period. Same store sales gained 0.6% on a year-over-year basis.
Franchise sales were $315.4 million, a decline of 1.8% from the comparable period’s $321.3 million.
Net income for the nine months was $67.6 million or 82 cents per diluted share, compared to $72.2 million or 88 cents per diluted share – a drop of 6.8% on a per share basis.
Leon was also reasonably confident about LFL’s ongoing performance.
“Despite the uncertainty over certain key economic indicators, we believe that the overall economy remains relatively strong. Although it is difficult to gauge future consumer confidence and what impact it may have on retail, we remain confident that our sales and profitability will increase,” he said.
“Given the company’s strong financial position, our principal objective is to increase market share and profitability. We remain focused on our commitment to continuously invest in digital innovation that will drive more customers to both our online e-commerce presence and our 304 physical locations across Canada,” he continued.