The North West Company reported its unaudited financial results for the second quarter ended July 31, 2015. Earnings from operations increased 7% to $28.2 million compared to $26.3 million in the second quarter last year.
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The North West Company also announced that the board declared a dividend of $0.31 per share, an increase of $0.02 or 6.9% per share, to shareholders of record on September 30, 2015, to be paid on October 15, 2015.
Sales increased 11.9% to $448.7 million compared to $401.1 million in the second quarter last year driven by same store sales gains across all banners and the impact of foreign exchange on the translation of International Operations sales.
Excluding the foreign exchange impact, consolidated sales increased 6.2% and were up 5.6%1 on a same store basis.
Food sales increased 7.3% and were up 6.3% on a same store basis with all banners contributing to the sales growth. General merchandise sales increased 4.3% and were up 2.5% on a same store basis as sales growth in International Operations and our rural and urban markets in Canada more than offset lower sales in more remote northern Canada markets.
Earnings from operations increased 7% to $28.2 million compared to $26.3 million in the second quarter last year. Gross profit dollars were up 13.9% driven by sales, the impact of foreign exchange and a 53 basis point increase in the gross profit rate compared to last year.
The increase in the gross profit rate is largely due to product sales blend changes and special buys. Selling, operating and administrative expenses increased 16% and were up 81 basis points as a percentage to sales.
The expense increase was substantially due to the impact of foreign exchange on the translation of International Operations expenses and higher incentive plan costs primarily related to an 11.1% increase in share price in the quarter compared to a 1% decrease last year.
Earnings before interest, income taxes, depreciation and amortization (EBITDA) increased 6.5%to $38.8 million led by strong EBITDA growth in the International Operations and the impact of foreign exchange.
Excluding the impact of foreign exchange, EBITDA was up 2% compared to last year and as a percentage to sales was 8.8% compared to 9.1% last year.
Net earnings increased $1.3 million or 7.6% to $18.1 million and diluted earnings per share was $0.37 per share compared to $0.35 per share last year as net earnings growth in the International Operations and the impact of foreign exchange more than offset lower net earnings in the Canadian Operations.
Excluding the impact of foreign exchange, net earnings increased 2.1% compared to last year. ■