TORONTO – Leon’s Furniture Ltd. (TSX:LNF) is reporting lower revenue and profit for its fourth quarter, citing weakness in the economy and a competitive retail environment.
The Toronto-based retailer posted net income of $16 million, or 22 cents per diluted share, for the three months ended Dec. 31 compared to $19.9 million, or 27 cents per diluted share in the year earlier period.
Sales, including corporate and franchise stores, came in at $248 million for the quarter, down from $255 million in the year earlier period.
Same store corporate sales were down two per cent year over year.
“2012 proved to be another challenging year where we saw continuing weakness in the economy, creating a very competitive retail environment,” the company said in a release.
“We want to thank all of our associates for their efforts and dedication in helping us to mitigate the impact of these challenges on our financial results.”
For the year, Leon’s reported net income was $46.8 million, or 65 cents per diluted share, compared to $56.7 million or 78 cents per diluted share in 2011.
Sales, including corporate and franchise stores, came in at $880.2 million in 2012 compared to $879.5 million in 2011. Same store corporate sales were down 2.9 per cent year over year.
Last November, Leon’s announced plans to acquire Edmonton-based rival The Brick Ltd. in a friendly deal they say will help the Canadian retailers cope with U.S.-based competitors.
Under the deal, Brick shareholders may receive $5.40 in cash per common share or 0.0054 convertible debentures. For each warrant, the holder may receive $4.40 in cash per warrant or 0.0044 convertible debentures per warrant.
Leon’s said it expects its acquisition of The Brick (TSX:BRK) to close before the end of March, noting that professional fees incurred from the deal shaved off two cents per common share in earnings for the quarter.
Leon’s, founded in 1909 in Welland, Ont., has 76 stores with locations in every province except British Columbia.
The Brick, which opened its first store in Edmonton in 1971, has 230 stores operating under The Brick, United Furniture Warehouse, The Brick Mattress Store and Urban Brick banners.
Shares in Leon’s were down 34 cents, or 2.7 per cent, to $12.25 in Thursday afternoon trading on the Toronto Stock Exchange.