The North West Company (NWC) Q1 2025 earnings summary

Executive summary

• First quarter sales rose 3.9% to $641.4 million, driven by same-store sales growth and new stores, partially offset by lower wholesale sales and a leap year effect last year.

• Net earnings grew 2.2% to $27.7 million, following a 22.3% increase in the prior year; adjusted net earnings rose 14.2% to $33.6 million.

• Gross profit increased 7.2% to $214.0 million, with a 103 basis point improvement in gross profit rate due to sales mix and lower markdowns.

• Same-store sales gains and improved gross profit rate, driven by changes in sales mix and lower markdowns, contributed to results.

• Board declared a quarterly dividend of $0.40 per share, payable July 15, 2025.

Financial highlights

• Same-store sales increased 3.5% year-over-year, with Canadian Operations up 4.0% and International Operations up 2.8%.

• EBIT rose 1.2% to $40.3 million; EBITDA increased 3.2% to $70.1 million; adjusted EBITDA up 10.1% to $78.0 million.

• Adjusted EBITDA for Canadian operations increased 5.8% year-over-year.

• Interest expense fell 10.5% to $3.9 million, reflecting lower rates and reduced long-term debt.

• Income tax expense rose to $8.7 million, with the effective tax rate up to 23.9% due to new Canadian tax legislation.

Outlook and guidance

• Management remains confident in the Next 100 initiative, focusing on operational excellence and customer value.

• Tariff impacts have been limited so far, but economic and inflationary uncertainty remains.

• First Nations Drinking Water settlement payments expected to continue supporting demand through 2025, but at a lower level than 2024.

• Inuit Child First Initiative funding extended to March 2026, but recent changes limit distribution, creating uncertainty for future sales impact.

• Next 100 program benefits expected to ramp up, with full maturity and clearer run-rate by 2026.