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Highlights

  • Leon’s Q2 2024 revenue rose 4.0% to CAD 617.6 million, driven by strong consumer demand.
  • Net income increased 9.9% to CAD 30.1 million, reflecting higher gross profit and lower costs.
  • The company plans to enhance market share and profitability while managing costs effectively.

Leon's Furniture Ltd (TSX:LNF) is a Canadian retailer of furniture, appliances, and electronics, operating multiple retail banners. Its market cap is CAD 2.02bn.

In Q2 2024, the company reported a revenue of CAD 617.6 million, reflecting a modest increase of 4.0% from CAD 593.8 million in the previous corresponding period (pcp). This growth was largely driven by sustained momentum in the furniture and appliance categories, indicating strong consumer demand. Additionally, gross profit rose to CAD 271.1 million, up 3.9% compared to CAD 260.9 million in pcp, primarily due to the higher revenue generated during the quarter.

The company also saw an improvement in its net income before income tax, which reached CAD 40.3 million, representing a 13.5% increase from CAD 35.5 million in pcp. This rise was attributed to the higher gross profit and a decrease in finance costs. Consequently, net income for the period grew to CAD 30.1 million, up 9.9% from CAD 27.4 million in Q2 2023.

Further, in Q2 2024, the company's financials showed a healthy trajectory, with system-wide sales and franchise sales increasing compared to Q2 2023. Additionally, the company reported improved cash flow from operations.

Recent Business Update

On October 4, 2024, the company announced that it would release its financial results for the third quarter, which ended on September 30, 2024, after noon ET on Thursday, November 7, 2024. In a previous update on August 8, 2024, it reported that its system-wide sales for the second quarter of 2024 reached CAD 742.1 million, marking a 3.4% increase. This upward trend in sales underscores the company's growth and positive momentum.

Company Outlook

With its improving financial position, the company aims to increase both market share and profitability. It is committed to managing costs effectively while consistently investing in growth initiatives. These efforts are designed to attract more customers to its online eCommerce sites and over 300 store locations across Canada.

Top 10 Shareholders:

The top 10 shareholders of LNF own about 72.66% of the total shares. Midgemar, Ltd. has the largest stake at approximately 17.68%. Jomila, Ltd. follows closely with around 16.84%.

Price Information

LEON's stock price has increased by approximately 19.17% over the past three months. However, it has fallen by about 3.44% in the last month. The stock’s 52-week high is CAD 30.64 and its 52-week low is CAD 16.46. The stock’s closing price is CAD 28.90 as of 22 Oct 2024.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 22, 2024. The reference data in this report has been partly sourced from EODHD/Others.