LFL Releases Strong Second Quarter Financial Results and Announces 20% Increase to the Quarterly Dividend

Executive Summary

• Leon's Furniture Limited reported strong financial results for the second quarter ended June 30, 2025, with system-wide sales increasing 4.0% to $771.5 million and revenue rising 4.3% to $644.1 million.
• Adjusted net income surged 31.8% to $39.4 million, driven by favorable sales mix, improved gross margins, and operational leverage that reduced SG&A expenses.
• The Company declared a quarterly dividend increase of $0.04 to $0.24 per share, payable in October 2025, and completed an amendment to its credit agreement extending the term to May 31, 2027.

Key Details

• System-Wide Sales: $771.5 million (up 4.0% from $742.1 million in Q2 2024).
• Revenue: $644.1 million (up 4.3% from $617.7 million), driven by a 6.5% increase in furniture sales and a 10.5% growth in the commercial appliance business.
• Same Store Sales: Increased 4.3% to $627.8 million.
• Gross Profit: $288.7 million (up 6.5%), with a gross profit margin rate of 44.82% (an improvement of 92 basis points).
• SG&A Expenses: $234.3 million, representing 36.38% of revenue (a 53 basis point improvement year-over-year).
• Adjusted Net Income: $39.4 million (up 31.8% from $29.9 million).
• Adjusted Diluted EPS: $0.57 (up 29.5% from $0.44).
• Net Income: $31.8 million (up 5.3% from $30.2 million), impacted by an after-tax mark-to-market loss of $7.6 million on foreign exchange derivatives.
• Liquidity: Unrestricted liquidity stood at $454.5 million as of June 30, 2025.
• Dividends:
  • Previous quarterly dividend paid: $0.20 per share.
  • New quarterly dividend declared: $0.24 per share (an increase of $0.04).
  • Payable date: October 7, 2025.
  • Record date: September 9, 2025.
• Credit Facility: The Company amended its existing credit agreement subsequent to quarter-end to extend the term to May 31, 2027.
• Legal Settlement: The Company recognized $1.4 million of the remaining legal settlement with CURO Group Holding's Corp.

Notable Quotes

• Mike Walsh, President and CEO: "Our team delivered another solid performance in Q2, with system-wide sales increasing 4.0% and adjusted diluted earnings per share growing 29.5%, reflecting our continued organizational focus and disciplined execution. We drove top-line growth through our integrated omnichannel platform and high in-store conversion rates, while gaining market share in our core categories."