LFL Releases Fourth Quarter Financial Results

Executive Summary

• Leon’s Furniture Limited reported Q4 2025 revenue of C$671.4 M (↑0.7%) and full‑year 2025 revenue of C$2,573.7 M (↑3.0%).
• Net income fell to C$51.0 M in Q4 (down 24.9% YoY) but rose modestly to C$157.0 M for the year (up 2.1% YoY). Adjusted net income increased 2.0% YoY after normalizing a one‑time settlement gain from 2024.
• The Board declared a quarterly dividend of $0.24 per common share and a special dividend of $0.50 per common share payable April 8, 2026.

Key Details

• Q4 2025 Highlights
• System‑wide sales: C$813.0 M (↑0.8%).
• Gross profit margin: 46.08% (up 23 bps YoY).
• SG&A expense ratio: 35.51% of revenue (↑13 bps YoY).
• Adjusted net income: C$51.0 M (↓16.4 M YoY, but +2.0% after normalizing the prior‑year settlement).

• Adjusted diluted EPS: $0.74 (down 24.5% YoY; up 1.3% after normalization).

• Full‑Year 2025 Highlights

• System‑wide sales: C$3,088.9 M (↑2.8%).
• Gross profit margin: 45.04% (up 65 bps YoY).
• SG&A expense ratio: 36.48% of revenue (down 24 bps YoY).
• Adjusted net income: C$158.9 M (↑5.3% YoY).

• Adjusted diluted EPS: $2.31 (↑5.0% YoY).

• Dividends

• Quarterly dividend declared: $0.24 per common share (payable April 8, 2026).

• Special dividend declared: $0.50 per common share (payable April 8, 2026).

• Liquidity

• Unrestricted liquidity as of Dec 31 2025: C$603.0 M (cash, equivalents, debt/equity instruments, undrawn revolving credit).

• Operational Commentary

• Furniture sales drove most revenue growth; appliance sales benefited from commercial channel strength.
• Mattress and electronics categories declined mid‑single digits due to promotional pressure.

• SG&A increase driven by higher occupancy costs (Edmonton distribution centre lease) and sales commissions; partially offset by lower financing fees from reduced Bank of Canada rates.

• One‑Time Items

• Q4 2024 included a pre‑tax settlement gain of C$23.4 M related to a breach of contract dispute with CURO Group Holdings Corp.; the 2025 results reflect the remaining settlement portion of C$4.2 M.

Notable Quotes

• Mike Walsh, President & CEO:

  “In 2025, our teams delivered the outstanding value and experience Canadians expect… System‑wide sales grew 2.8% to $3.1 billion, normalized adjusted diluted EPS increased 16.5%, and we continued to generate robust cash flow.”

• Mike Walsh, continued:

  “Despite headwinds from Canada Post disruptions and unfavorable weather, system‑wide sales were up 0.8% and gross margin expanded 23 basis points.”