“Our results this quarter reflect the continuing negative impact of high inflation and comparing to the strong results last year that were positively impacted by COVID-19-related income support payments”, said President and CEO
Financial Highlights
Sales First quarter consolidated sales increased 7.5% to
Gross Profit Gross profit increased 5.0% as sales gains were partially offset by a 73 basis point decrease in gross profit rate compared to last year. The decrease in gross profit rate was mainly due to changes in sales blend, the impact of higher freight and merchandise cost inflation that was not fully passed through in retail prices and an increase in markdowns.
Selling, Operating and Administrative Expenses Selling, operating and administrative expenses ("Expenses") increased
Earnings From Operations Earnings from operations (EBIT) decreased to
Net Earnings Net earnings decreased to
Non-GAAP Financial Measures
The Company uses the following non-GAAP financial measures: earnings before interest, income taxes, depreciation and amortization ("EBITDA"), adjusted EBITDA and adjusted net earnings. The Company believes these non-GAAP financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company for the reasons outlined below.
Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) is not a recognized measure under IFRS. Management believes that in addition to net earnings, EBITDA is a useful supplemental measure as it provides investors with an indication of the Company's operational performance before allocating the cost of interest, income taxes and capital investments. Investors should be cautioned however, that EBITDA should not be construed as an alternative to net earnings determined in accordance with IFRS as an indicator of the Company's performance. The Company's method of calculating EBITDA may differ from other companies and may not be comparable to measures used by other companies.
Adjusted EBITDA and Adjusted Net Earnings are not recognized measures under IFRS. Management uses these non-GAAP financial measures to exclude the impact of certain income and expenses that must be recognized under IFRS. The excluded amounts are either subject to volatility in the Company's share price or may not necessarily be reflective of the Company's underlying operating performance. These factors can make comparisons of the Company's financial performance between periods more difficult. The Company may exclude additional items if it believes that doing so will result in a more effective analysis and explanation of the underlying financial performance. The exclusion of these items does not imply that they are non-recurring.
These measures do not have a standardized meaning prescribed by GAAP and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to the other financial measures determined in accordance with IFRS.
Reconciliation of consolidated earnings from operations (EBIT) to EBITDA and adjusted EBITDA:
First Quarter | |||||
($ in thousands) | 2023 | 2022 | |||
Earnings from operations (EBIT) | $ | 33,768 | $ | 41,431 | |
Add: Amortization | 25,184 | 23,514 | |||
EBITDA | $ | 58,952 | $ | 64,945 | |
Adjusted for: | |||||
Share-based compensation expense | 4,834 | 3,737 | |||
Adjusted EBITDA | $ | 63,786 | $ | 68,682 |
Reconciliation of consolidated net earnings to adjusted net earnings:
First Quarter | |||||
($ in thousands) | 2023 | 2022 | |||
Net earnings | $ | 22,197 | $ | 28,161 | |
Adjusted for: | |||||
Share-based compensation expense, net of tax | 3,860 | 3,000 | |||
Adjusted net earnings | $ | 26,057 | $ | 31,161 |
Certain share-based compensation costs are presented as liabilities on the Company's consolidated balance sheets. The Company is exposed to market price fluctuations in its share price through these share-based compensation costs. These liabilities are recorded at fair value at each reporting date based on the market price of the Company's shares at the end of each reporting period with the changes in fair value recorded in selling, operating and administrative expenses.
Further information on the financial results is available in the Company's 2023 first quarter Report to Shareholders, Management's Discussion and Analysis and unaudited interim period condensed consolidated financial statements which can be found in the investor section of the Company's website at www.northwest.ca.
First Quarter Conference Call
North West will host a conference call for its first quarter results on
Notice to Readers
Certain forward-looking statements are made in this news release, within the meaning of applicable securities laws. These statements reflect North West's current expectations and are based on information currently available to management. Forward-looking statements about the Company, including its business operations, strategy and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects”, “anticipates”, “plans”, “believes”, “estimates”, “intends”, “targets”, “projects”, “forecasts” or negative versions thereof and other similar expressions, or future or conditional future financial performance (including sales, earnings, growth rates, capital expenditures, dividends, debt levels, financial capacity, access to capital, and liquidity), ongoing business strategies or prospects, the Company's intentions regarding a normal course issuer bid, the potential impact of a pandemic on the Company's operations, supply chain and the Company's related business continuity plans, the realization of cost savings from cost reduction plans, and possible future action by the Company.
Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the retail industry in general. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by the Company due to changes in economic conditions, political and market factors in
The reader is cautioned that the foregoing list of important factors is not exhaustive. Other risks are outlined in the Risk Management section of the 2022 Annual Report and in the Risk Factors sections of the Annual Information Form and Management Information Circular, material change reports and news releases. The reader is also cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements. Other than as specifically required by applicable law, the Company does not intend to update any forward-looking statements whether as a result of new information, future events or otherwise.
Additional information on the Company, including our Annual Information Form, can be found on SEDAR at www.sedar.com or on the Company's website at www.northwest.ca.
Company Profile
The common shares of North West trade on the
For more information contact:
Phone 204-934-1482; fax 204-934-1317; email dmcconnell@northwest.ca
Phone 204-934-1397; fax 204-934-1317; email jking@northwest.ca
Source:
2023 GlobeNewswire, Inc., source