The Brick third-quarter income rises 23 per cent as revenues fall
Published Wednesday, November 14, 2012 9:06PM EST
EDMONTON -- The Brick Ltd. (TSX: BRK), which just announced a friendly takeover deal from rival Leon's, says its third quarter net income rose 23 per cent.
The Edmonton-based company said its profit was $18.7 million, or 15 cents per diluted share, compared to $15.1 million, or 11 cents per diluted share.
Sales fell 0.6 per cent to $368.5 million and were partially impacted by store closures.
The Brick ended the third quarter with 162 corporate stores compared to 173 corporate stores at the end of the same quarter in 2011.
It says corporate same-store sales increased by 0.8 per cent.
Operating expenses fell 2.3 per cent to $124.4 million.
The earnings come just days after Toronto-based Leon's Furniture Ltd. (TSX:LNF) said it would purchase The Brick for $700 million, saying they should be able to enhance their competitiveness in an increasingly gritty retail environment even though both banners will continue to fly separately.
The Canadian retail landscape has been shifting in recent years as more American chains in search of growth opportunities make their way north, which has increased competition in retail segments, including furniture.
"This transaction with Leon's, although subject to closing conditions and certain approvals, represents a major milestone in the evolution of our company," The Brick president and CEO Vi Konkle said in the earnings release.
"We welcome the opportunity to partner with Leon's, an iconic corporation. By joining forces, we can strengthen both of our businesses, enhancing everything that has made Leon's and the Brick two of Canada's best-known retailers while preserving The Brick's roots in Edmonton, Alberta".