Shares of Leon’s Furniture Ltd. (TSE: LNF) soared 8.7% on Wednesday after the Canadian company reported outstanding results for the second quarter of 2022.
Revenue increased almost 10% year-over-year to a record C$647 million, driven by solid performance across all product categories. Same-store sales also jumped 10% to C$631.8 million.
Gross margin declined marginally to 43.82% from 44.11% in the second quarter of last year. Adjusted EBITDA rose C$1.1 million year-over-year to C$95.9 million.
The furniture retailer reported adjusted earnings of 70 cents per share versus the Street’s estimate of 39 cents and the year-ago earnings of 58 cents per share.
How Many Stores Does Leon’s Furniture Have?
Headquartered in Ontario, Leon’s has 306 retail stores spread across Canada. It sells electronics, appliances and furniture at these stores. The company also runs five websites: appliancecanada.com, midnorthern.com, furniture.ca, thebrick.com and leons.ca.
Is Leon’s a Good Investment?
Apart from the last two quarters, Leon’s earnings have consistently surpassed consensus estimates. With the lifting of COVID-19 restrictions, the company expects sales to pick up just like in the second quarter. However, investors might want to wait for one more quarter before investing in the stock to ensure that the company is back on its growth trajectory.
This view is supported by TipRanks’ Stock Forecast tool, which has a Hold rating on LNF based on one Hold. LNF’s average price target of C$20 implies upside potential of 10.5%.
On the contrary, TipRanks’ Insider Trading Activity tool shows that Insider Confidence Signal is currently Very Positive for Leon’s, with corporate insiders buying LNF shares worth C$3.8 million in the last three months.
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