TORONTO - Leon's Furniture Ltd. (TSX:LNF) says it had $13 million of net income in the third quarter, a 15 per cent decline from the same time last year as the addition of four stores last year added overhead expenses during a period of flat sales growth.
Net income for the quarter was equal to 19 cents per common share, down from 22 cents per share or $15.3 million in the comparable period of 2011.
Leon's issued its report two days after announcing plans to acquire The Brick, an Edmonton-based rival, in a friendly deal they say will help the Canadian retailers cope with U.S.-based competitors such as Target and Walmart.
Toronto-based Leon's says overall sales throughout its system, including franchised locations, totalled $223.68 million in the three months ended Sept. 30.
That was barely changed from the third quarter of 2011 when overall system sales totalled $223.65 million.
Net operating expenses rose three per cent from a year ago to $54.2 million — mainly due to higher marketing costs and administration expenses due to the addition of four stores last fall.
A weakening Canadian dollar eroded Leon's gross margin to 40.9 per cent from 42.2 per cent last year.