Canadian food retailer The North West Company Inc (TSE:NWC, Mkt cap 1.26B, P/E 18.22, Div/yield 0.31/4.75, EPS 1.43, Shares 48.52M) has reported lower profit for the second quarter despite an increase in sales.
Its quarterly dividend remained unchanged at C$0.31 per share.
The company said on Thursday that net earnings for the three months ended July 31, 2016, were C$16.4m, down C$1.7m or 9.4% compared to the same period last year as earnings growth in its International Operations and the impact of foreign exchange were more than offset by lower earnings in Canadian Operations.
Excluding the impact of foreign exchange, North West’s net earnings were down 12.4% year-on-year.
Sales for the quarter grew 2.6% to C$460.6m, up from C$448.7m in the second quarter last year, driven by food sales gains and the impact of foreign exchange on the recording of international sales.
Excluding the foreign exchange impact, consolidated sales rose 1.3% and were up 0.6% on a same-store basis.
Commenting on the company’s second quarter performance, North West president and CEO Edward Kennedy said: “Our consumer and competitive environment was more challenging in the second quarter. Our Top Markets and Top Category work led our sales but did not generate enough profit momentum to offset other areas. While we remain committed to this plan we are equally committed to better execution and getting more results from our overall business within these market conditions.”
In June, North West reported a 13.3% increase in net earnings to C$17.8m for the first quarter and a 6.0% increase in sales to C$439.0m. But Kennedy referred to the prospect of “a very mixed consumer environment over the rest of the year”.
Winnipeg MB based North West Company Inc is a retailer to under-served rural communities and urban neighbourhood markets in northern Canada, western Canada, rural Alaska, the South Pacific and the Caribbean. Its stores offer products and services with an emphasis on food. NWC operates in two segments: Canadian Operations and International Operations. The Canadian operations operate through its subsidiary, The North West Company LP. and it includes 126 Northern stores, 34 Giant Tiger junior discount stores, seven NorthMart stores, 12 Quickstop convenience stores, one Valu Lots clearance center, one Solo Market test store, one Drug Store, Crescent Multi Foods and two North West Company Fur Marketing outlets. Its International operations operate through The North West Company (International) Inc. and its Cost-U-Less, Inc. subsidiaries., and its operations include 30 AC Value Centers, three Quickstop convenience stores, Pacific Alaska Wholesale, 12 Cost-U-Less and one Island Fresh Supermarket. More from Reuters »
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