The North West Company, a major retailer serving rural and urban communities across Canada and internationally, announced second-quarter results for the period ending July 31, 2024. The company, which operates 229 stores under various banners, reported a 4.6% increase in consolidated sales, reaching $646.5 million.
Given the strong numbers, North West’s Board of Directors declared a quarterly dividend of $0.40 per share. It’s a 2.6% increase from the previous quarter.
Dan McConnell, President and CEO of the North West Co., said, “We are very pleased with the results this quarter, delivering increases in adjusted EBITDA and adjusted net earnings compared to a strong second quarter last year.”
The company’s Canadian operations led the charge, with same-store sales increasing by 6.8%. This growth helped offset more modest gains in International Operations, which saw a 0.9% increase in same-store sales.
North West’s gross profit rose by 7.5% to $219.8 million, bolstered by sales gains and a 91 basis point improvement in gross profit rate. The company attributed this increase to changes in sales blend and a reduction in markdowns.
However, the retailer faced challenges in the form of increased expenses. Selling, operating, and administrative costs rose by 10.1% compared to the previous year, primarily due to inflationary pressures and higher wage costs.
Despite these headwinds, North West’s earnings before interest, income taxes, depreciation, and amortization (EBITDA) grew by 4.1% to $83.4 million. Adjusted EBITDA, which excludes certain non-comparable expenses, increased by 6.1% to $88.4 million.
The company’s net earnings saw a slight decrease of 3.0% to $36.9 million, partly due to the impact of new tax legislation. The Global Minimum Tax Act, enacted in Canada on June 20, 2024, resulted in a $1.0 million increase in income tax expense for the quarter.
Looking ahead, McConnell expressed optimism about the company’s direction. “We are building a strong foundation through our focus on operational excellence initiatives and the momentum in our Canadian business,” he noted.
The North West Company maintains a significant presence in Canada, with additional operations in Alaska, the South Pacific, and the Caribbean. The company’s diverse portfolio includes stores operating under banners such as Northern, NorthMart, Giant Tiger, Alaska Commercial Company, Cost-U-Less, and RiteWay Food Markets.
Related
