The North West Company (NWC) Q1 2024 earnings summary

Executive summary

• Consolidated sales increased 4% year-over-year to $617.5 million, driven by same-store sales gains, an extra day of sales, and new store contributions.

• Net earnings grew 22.3% to $27.2 million, with diluted EPS at $0.53 versus $0.43 last year.

• Same-store sales increased 3.8% overall, with Canadian operations up 4.7% and international operations up 2.5%.

• Food same-store sales rose in both regions, while general merchandise was mixed, with Canadian strength offsetting international softness.

• Quarterly dividend of $0.39 per share declared, payable July 15, 2024.

Financial highlights

• Gross profit increased 7.9% to $199.6 million, with a 117 basis point improvement in gross profit rate year-over-year.

• EBIT rose 17.9% to $39.8 million; EBITDA up 15.2% to $67.9 million year-over-year.

• Adjusted EBITDA (excluding share-based compensation) increased 11.0% to $70.8 million, representing 11.5% of sales.

• Adjusted net earnings (excluding share-based compensation) rose 12.9% to $29.4 million.

• Selling, operating, and administrative expenses rose 5.7%, mainly due to inflation, labor, depreciation, and new store costs.

Outlook and guidance

• Merchandise and freight inflation expected to moderate for the remainder of 2024.

• Anticipated increase in consumer demand from First Nations Drinking Water Settlement payments, with most payments expected in the latter half of 2024 and into 2025.

• Next 100 program aims to drive incremental EBIT over the next three years, with benefits ramping up through 2025 and 2026.

• Management remains focused on operational excellence, maintaining in-stock positions, and delivering value to customers.