Q: Profit margin increased, higher revenue... in a tough retail environment Leon's seems to be getting stronger. Would you agree?
Could you comment on earnings.
Wouldyou add?
Could you comment on earnings.
Wouldyou add?
5i Research Answer:
Certainly the quarter was good. EPS of 35c beat estimates of 22c; revenue of $579M beat estimates of $550M. EBITDA of $60.3M beat estimates by 16%. Two brokers upped their target prices. Same store sales increased 3%. Adjusted net income rose 47%. Margins increased nearly one point. Most categories showed growth. Furniture was strong, but keep in mind there may be some 'pull through' sales here as consumers aim to avoid possible tariff-related price hikes. With the stock staying very cheap at 11X earnings and a 3.2% dividend, we are veru comfortable here. We would be fine adding to a size that reflects its small-company and somewhat cyclical risks.