WINNIPEG, Manitoba, September 08, 2021 (GLOBE NEWSWIRE) – (TSX: CNO): The North West Company Inc. (the “Company” or “North West”) today announced its unaudited financial results for the second quarter ended July 31, 2021. It also announced that the board of directors has declared a dividend of $ 0.37 per share, an increase of $ 0.01 or 2.8% per share, to shareholders of record on September 30, 2021, payable on October 15, 2021.
“This was another strong quarter, especially given the extraordinary increases in sales and comparable store earnings linked to the pandemic in 2020,” commented President and CEO Dan McConnell. “Our top priority remains focused on the safety and well-being of our customers and employees, and on ensuring that we continue to provide essential products and services that people depend on. The relationships with our suppliers and the agility provided by our freight airline, North Star Air, were key contributors to meeting strong customer demand during the quarter.
The new Delta variant poses constant challenges. Our tourism-dependent markets and other communities we serve with lower vaccination rates have seen some of their biggest increases in COVID-19 cases since the start of the pandemic. The North West Company is doing its part by adapting to changing business conditions to maintain market share gains in 2020, combined with current vaccination rates, the emergence of variants and the reduction of some. stimulus programs in Canada and the United States, it is expected that revenues in 2021 will be higher than pre-pandemic (2019) levels, but lower than 2020. “
Second quarter consolidated sales decreased 12.9% to $ 565.1 million, mainly due to the impact of the sale and closure of the Company’s Giant Tiger stores last year , net of the impact of wholesale food sales to Giant Tiger stores sold (the “Giant Tiger Transaction”) and the negative currency impact on the conversion of International Operations sales. On a comparable store basis, sales remained strong with a decrease of only 4.8%1 compared to a 25.4% increase in the second quarter of last year, but was up 21.4% from the second quarter of 2019, as the continued impact of factors related to COVID-19, including including community spending and personal income support, was lower than last year.
Gross margin decreased by 12.8% due to the impact of lower sales partially offset by a 4 basis point increase in gross margin rate compared to last year mainly due to favorable changes in the composition of product sales and lower markdowns and inventory reduction.
Selling, operating and administrative expenses (“fees”) increased $ 1.6 million or 1.2% from the prior year and increased 323 basis points as a percentage of sales in large part due to non-comparable factors which included a pre-tax gain of 24.7 million from the Giant Tiger operation in the second quarter of last year partly offset by changes in stock-based compensation costs. Excluding non-comparable factors, expenses decreased $ 16.4 million and decreased 40 basis points as a percentage of sales, primarily due to lower store expenses related to the Giant Tiger transaction, from a decrease in expenses related to COVID-19, the impact of foreign exchange on the conversion of international operating expenses and the decrease in costs of the annual incentive plan.
Operating income decreased to $ 58.5 million from $ 87.8 million last year, but increased $ 28.9 million from 2019 and earnings before interest, income taxes. profits, depreciation and amortization (“EBITDA2“) decreased to $ 81.1 million from $ 110.9 million last year, but increased $ 29.5 million from 2019. The decrease from windfall profits from the last year is due to the impact of non-comparable factors and lower sales Adjusted EBITDA2, which excludes non-comparable factors, decreased $ 11.9 million from last year, but increased $ 30.4 million or 56.7% from 2019 due to factors of previously mentioned sales, gross margin and expenses.
Net income decreased $ 20.2 million to $ 42.4 million primarily due to non-comparable factors, but increased $ 24.5 million or 136.3% from second quarter of 2019. Net income attributable to shareholders was $ 41.9 million and diluted earnings per share was $ 0.86 per share compared to $ 1.25 per share last year due to of the factors mentioned above, but up from $ 0.35 per share two years ago. Adjusted net profit2, which excludes the after-tax impact of non-comparable factors, decreased $ 5.8 million from exceptionally strong last year net income due to the above factors and the negative impact of foreign exchange on the conversion of net income from international operations, but was up $ 24.0 million or 116.0% from the second quarter of 2019.
Further information on the financial results is available in the company’s second quarter 2021 report to shareholders, the MD&A and the unaudited interim condensed consolidated financial statements which can be viewed in the investors section of the company’s website. at the address www.nord-ouest.ca.
Second Quarter Conference Call
North West will host an earnings conference call on September 9, 2021 at 8:30 a.m. CST. To access the call, please dial 416-406-0743 or 800-898-3989 with access code 8270861. The conference call will be archived and accessible by dialing 905-694-9451 or 800-408 -3053 with an access code 8215499 no later than October 10, 2021.
Notice to readers
Certain forward-looking statements are made in this press release within the meaning of applicable securities laws. These statements reflect North West’s current expectations and are based on information currently available to management. The words can, will, should, believe, expect, plan, anticipate, intend, estimate, predict, potential, continue, or the negative of these terms, identify forward-looking questions. These statements speak only as of the date of this press release. Actual results could differ materially from those anticipated in these forward-looking statements.
Forward-looking statements should not be relied upon because they involve known and unknown risks, uncertainties and other factors, which may cause North West’s actual results, performance, capital expenditures or achievements to differ. materially of the results, performance, capital expenditures or achievements expressed or implied by such forward-looking statements, including the Company’s intentions regarding a normal course issuer bid, the anticipated impact of the COVID-19 pandemic on the operations of the Company and the related business continuity plans of the Company and the achievement of the savings expected from the administrative cost reduction plans. Factors that could cause actual results to differ materially from those stated in forward-looking statements include, without limitation, business performance, fluctuations in interest rates and currency values, legislative developments and regulatory developments, the occurrence of weather conditions – related and other natural disasters, changes in tax laws and the risks and uncertainties detailed in the section entitled Risk Factors in North West’s MD&A and Annual Information Form , both for the fiscal year ended January 31, 2021. The foregoing list is not an exhaustive list of possible factors. These and other factors should be carefully considered, and readers are cautioned not to place undue reliance on these forward-looking statements. North West assumes no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
The North West Company Inc., through its subsidiaries, is a leading retailer of food and everyday products and services to rural communities and urban neighborhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 213 stores under the trade names Northern, NorthMart, Giant Tiger, Alaska Commercial Company, Cost-U-Less and RiteWay Food Markets and has annualized sales of approximately C $ 2.0 billion.
North West’s common shares trade on the Toronto Stock Exchange under the symbol NWC.
For more information, contact:
Dan McConnell, President and CEO, The North West Company Inc.
Telephone 204-934-1482; fax 204-934-1317; email [email protected]
John King, Executive Vice President and Chief Financial Officer, The North West Company Inc.
Telephone 204-934-1397; fax 204-934-1317; email [email protected]
1 Excluding currency effect
2 See the Non-GAAP Measures section of the MD&A