Grocery and retail chain The North West Company Inc. (TSE:NWC, Mkt cap 1.47B, P/E 20.50, Div/yield 0.31/4.12, EPS 1.47, Shares 48.52M) announced last week an increase in quarterly profit and declared a dividend of C$0.31 per share.
For the first quarter ended April 30, 2016, net earnings increased by 13.3% or C$2.1m to C$17.8m, driven by earnings growth in the company’s International Operations, as well as the impact of foreign exchange and a lower effective tax rate. Excluding the impact of foreign exchange, net earnings were up 8.9% year-on-year.
“Northern Canada food sales were a highlight in the quarter, combined with continued performance gains in the Caribbean region,” commented North West president and CEO Edward Kennedy. “Work on Top Categories is delivering results led by our fresh food service, convenience merchandise and targeted general merchandise product groups. We have the right ‘get sales’ focus and the experience of multi-year programs now in place. These will be key factors as we manage through a very mixed consumer environment over the rest of the year.”
Sales for the quarter rose 6% to C$439m, from C$414m in the first quarter last year.
Earnings before interest, income taxes, depreciation and amortization (EBITDA) for the three-month period increased 9.3% to C$37.6m led by EBITDA gains in International Operations and the impact of foreign exchange. Excluding the foreign exchange impact, EBITDA was up 6.3% compared to last year and as a percentage to sales was 8.7% compared to 8.5% a year ago.
In the company’s Canadian Operations, sales grew 4.5% to C$265.9m and EBITDA was up 1.9% to C$24.8m compared to C$24.4m last year. EBITDA as a percentage of sales dipped to 9.3% from 9.6% last year.
The International Operations saw first quarter sales rise 2.1% to C$130.4m and EBITDA showed a healthy increase of 19.6% to C$9.6m compared to C$8m last year. EBITDA as a percentage of sales was 7.4% compared to 6.3% in the first quarter last year, which North West attributed to sales growth, gross profit rate improvement and well controlled expenses.
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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