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Winnipeg, December 11, 2013 (TSX: NWC): The North West Company Inc. (the “Company” or “North West”) today reported its unaudited financial results for the third quarter ended October 31, 2013. It also announced that the Board of Directors have declared a dividend of $0.28 per share to shareholders of record on December 31, 2013, to be paid on January 15, 2014.
Sales increased 2.5% to $387.2 million compared to $377.7 million in the third quarter last year as same store sales growth and new store sales in our International Operations more than offset the sales impact of the store closures in the Canadian Operations in the fourth quarter of 2012. Excluding the foreign exchange impact, sales increased 0.8% and were up 2.3% on a same store basis. Food sales increased 1.6% and were up 2.5% on a same store basis and general merchandise sales decreased 1.7% but were up 1.3% on a same store basis.
Earnings from Operations increased 2.5% to $26.9 million compared to $26.2 million in the third quarter last year. Gross profit dollars increased 3.0% largely due to sales growth in the International Operations and a 13 basis point improvement in gross profit rate on a consolidated basis. Selling, operating and administrative expenses increased 3.1% compared to last year and were up 13 basis points as a percentage to sales mainly due to higher expenses related to new stores in the International Operations and the impact of foreign exchange on the translation of U.S. denominated expenses. Higher employee costs, due in part to pension plan expense and share-based compensation costs related to an increase in the share price in the quarter, and higher utility costs in remote markets were also factors. Excluding the foreign exchange impact, earnings from operations increased 1.3% compared to last year.
Trading profit or earnings before interest, income taxes, depreciation and amortization (EBITDA) increased 2.6% to $36.5 million compared to $35.6 million last year with both the Canadian Operations and International Operations contributing to the increase.
Excluding the foreign exchange impact, trading profit increased 1.4% compared to last year and was 9.5% as a percentage to sales compared to 9.4% last year.
Third quarter net earnings increased 1.3% to $17.4 million compared to last year and diluted earnings per share were flat to last year at $0.36 per share.
“It was encouraging to see that sales and margins strengthened across all of our banners with the exception of northern Canada” commented North West President & CEO Edward Kennedy. “Northern Canada’s economy remains relatively flat with employment and consumer income growth at a low ebb. In this environment we continue to focus on productivity work and meeting our customers’ most important everyday shopping needs.”
Further information on the financial results is available in the Company’s third quarter report to shareholders, Management’s Discussion and Analysis and unaudited interim condensed consolidated financial statements which can be found in the investor section of the Company’s website at www.northwest.ca.
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