Two Canadian retailers: two outlooks

Article Excerpt

LEON’S FURNITURE LTD. $16.91 (Toronto symbol LNF; TSINetwork Rating: Average) (416-243-7880; www.leons.ca; Shares outstanding: 76.3 million; Market cap: $1.3 billion; Dividend yield: 2.8%) has steadily increased the number of stores under its Leon’s banner from 27 in 2003 to today’s 86. In March 2013, the company nearly quadrupled in size with its $700 million purchase of The Brick, its main rival. That chain now has 217 locations across Canada and still operates separately. In the three months ended December 31, 2017, Leon’s overall sales rose 1.3%, to $595.9 million from $588.4 million a year earlier. On a same-store basis, sales gained 0.4%. The company earned $36.1 million, or $0.45 a share, in the quarter. That’s an increase of 4.0% from $34.7 million, or $0.43, a year earlier. Leon’s took a risk with an acquisition as big as The Brick. But the integration went well. The company still has lots of opportunity to open new Leon’s and Brick outlets. The shares yield 2.8%. Leon’s is a buy. REITMANS (CANADA) LTD. $3.97 (Toronto…

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