LFL sees revenue surge
TORONTO – Leon’s Furniture Limited (LFL), this country’s largest full-line furniture retailer, has reported substantially higher revenues for both the second quarter and first half of 2021. It also noted continued double-digit growth in its e-commerce activity, which encompasses all of its banners.
For the three months ending June 30, 2021, total system-wide revenues were $714.4 million, a 40.1% leap from the $509.9 million recorded for the same period last year.
Corporate store revenues for the quarter were $588.5 million, a 41.2% gain over the comparable period’s $416.7 million. The company said these increases were earned despite approximately half of its stores being temporarily closed due to government-mandated pandemic closures for much of the period’s 13 weeks. Same store sales were pegged at 41.1%.
LFL noted e-commerce sales for the second quarter grew 46% on year-over-year basis, which is on top of the 504% growth in e-commerce sales that occurred in the prior year’s period when compared to the second quarter of 2019. Analysts have estimated e-commerce represents about 38% of sales for the period – roughly $223.6 million. Prior to the pandemic, e-commerce represented roughly 5% of LFL sales.
Meanwhile, sales by its franchise network were pegged at $125.9 million for the second quarter, up 35.1% from the $93.2 million for the three months ending June 30, 2020.
Net income for the second quarter was $46.0 million or 58 cents per diluted share, compared to last year’s $47.2 million or 58 cents per diluted share – unchanged on a per share basis.
“During the quarter, we achieved double-digit revenue increases in all regions and product categories, with a 41.1% increase in same store sales driven by our scalable e-commerce business in a period where almost half of the company’s retail store locations experienced government mandated temporary store closures,” LFL chief executive officer Ed Leon said in a statement, adding, “Importantly, the company’s steady focus on operational execution and profitability, as well as higher operating profit margins in the e-commerce business.”
He also told shareholders the company saw increases across the country and in all product categories “but with significant strength in the furniture product category.”
Leon retired as CEO on July 1, although he remains on LFL’s board of directors. He was succeeded by Mike Walsh, who now becomes the first non-Leon family member to steer the company in its 100-plus history.
For the six months also ending June 30, 2021, LFL system-wide revenues were $1.41 billion, up 27.4% from the $1.11 billion for the first half of 2020. Based on the latest data from Statistics Canada, this gave LFL at 23.8% share of the Canadian market during the first half of 2021.
Corporate store sales were up 26.8% at $1.16 billion from the comparable period’s $914.3 million. Same store sales climbed 26.3%.
Franchise store sales totaled $251.9 million, up 30.0% from last year’s $193.7 million.
Net earnings were $86.9 million or $1.08 per diluted share, compared to $39.0 million or 49 cents per share a year ago – an uptick of 120.4% on a per share basis.
During the first half, the company closed one Brick Outlet store, reducing its corporate store count to 203. It also has 100 franchise locations.
In a note to shareholders, Leon said while “in the short term, the duration and full financial effect of COVID-19 is unknown” the company believes “the underlying Canadian economy remains relatively strong.
“Although it is difficult to gauge future consumer confidence and what impact it may have on retail, we remain cautiously optimistic that our sales and profitability will increase,” he continued, adding, “Given the company’s strong and continuously improving financial position, our principal objective is to increase our market share and profitability.”
At the end of June, the publicly held Leon’s Furniture Limited a total of 303 stores under five banners, including: Leon’s, Appliance Canada, The Brick, The Brick Mattress Store and Brick Outlet.