TORONTO – Revenue for Canadian retailer Leon’s Furniture decreased considerably, because of the store closings necessitated by the pandemic, to C$416.7 million for the period ended June 30 compared with C$560.9 million in the second quarter of 2019.
Also, according to the company’s quarterly earnings report, the gross profit margin increased slightly from 43.53% in the second quarter 2019 to 43.65% in the current quarter.
Total system-wide sales were C$509.9 million in the 2020 second quarter compared with C$667.7 million in last year’s second quarter; while same-store corporate sales decreased by 26.4% compared with the prior year’s second quarter. The adjusted diluted earnings per share grew by 93.3% to a record C58 cents in June 2020 compared with C30 for the same period last year. The company also decreased its dividend from C14 cents to C12 cents, a decrease of 14.3%.
Edward Leon, president and CEO of Leon’s Furniture, said the company’s e-commerce division continued to grow strongly during the quarter, with its investment in e-commerce back in 2018 positioning the company to be able to scale infinitely online. The company’s e-commerce initiated sales during the quarter increased by more than 500% compared with the second quarter 2019. Leon said the sales significantly mitigated the reduction in revenue and drove improved gross margins and operating leverage in the quarter.
“Backing this performance is a team of loyal, customer-service focused associates, unencumbered ownership of over 4.2 million square feet of real estate, and a rock-solid balance sheet with almost $500 million of available unrestricted liquidity,” he added.
In response to the COVID-19 pandemic, the company introduced several measures in the quarter to provide support to associates and customers, which included reducing store hours, contactless home delivery and customer pickup protocols, enhancing cleaning protocols and actions to support physical distancing including limiting the number of customers allowed in-store. Leon’s Furniture continued to operate its distribution centers and warehouse locations across the country with enhanced safety protocols.
“These results highlight both the resilience of our business model as well as the determination of our associates coast-to-coast. I would like to thank all of our valued associates for their sacrifices this year,” Leon said. “From a low point where we were forced to temporarily lay-off almost 70% of our national workforce, I am proud to say that every one of our stores opened in June, and we have been able to bring back the majority of these associates.”
Leon’s Furniture Limited is the largest network of home furniture, appliances, electronics, and mattress stores in Canada. The company also operates three e-commerce sites: leons.ca, thebrick.com and furniture.ca.