LFL Group Sales Slip in Q3 Amid Consumer Pressure

A challenging marketplace impacted Leon’s Furniture Ltd. (LFL) Group in the third quarter of 2024.

Revenue was down 1.4 per cent to $651.9 million, compared with $661 million in the same period last year.

Net income totalled $36.9 million or 54 cents per diluted share, which was down 29.94 per cent compared with net income of $52.3 million or 75 cents per share in Q3 2023.

System-wide sales were $779.9 million, a decrease of 1.5 per cent over the same time period. However, year-to-date system-wide sales were up 3.1 per cent.

“The third quarter remained challenging, with continued pressure on Canadian consumers, alongside disruptions to freight and inventory caused by both geopolitical tensions and the rail strike,” said LFL president and CEO Mike Walsh in a statement. “Severe weather early in the quarter also impacted sales and shipments from several Ontario facilities.”

Despite these obstacles, Walsh said LFL navigated the quarter effectively, delivering higher retail margins and growth in wholesale, warranty and insurance.

“Our disciplined focus on gross margin management and cost control enabled us to maintain stable adjusted EBITDA, even with lower volumes,” he told shareholders.

EBITDA is earnings before interest, taxes, depreciation and amortization.

Looking to 2025, Walsh said he anticipates improvements. However, consumer and supply chain environments will remain challenging throughout the end of 2024.

LFL is the largest retailer of furniture, appliances and electronics in Canada. At the end of Q3, the Toronto-based retail group operated a total of 299 stores across the country under the following banners: Leon’s, The Brick, Appliance Canada, The Brick Mattress Store and The Brick Outlet.

It also operates six websites: leons.ca, thebrick.com, furniture.ca, midnorthern.com, transglobalservice.com and appliancecanada.com.