North West Company Stock (TSE:NWC) Plunges 10.8% on Mixed Q1 Earnings
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North West Company Stock (TSE:NWC) Plunges 10.8% on Mixed Q1 Earnings

Story Highlights

NWC stock fell by over 10% after reporting earnings per share that missed the mark despite revenue beating expectations.

During market hours on June 7, Canadian retailer The North West Company (TSE:NWC) released its Fiscal Q1-2023 results. Earnings per share (EPS) missed expectations, while revenues came in higher than expected. Nonetheless, the stock finished 10.8% lower after the report, likely due to the weakening profitability.

Q1-2023 Results

The North West Company’s revenue of C$593.6 million grew 7.5% year-over-year, beating the consensus estimate of about C$582.8 million. However, NWC’s adjusted earnings per share came in at C$0.51, lower than both last year’s figure of C$0.63 and the C$0.59 consensus estimate. Further, North West’s adjusted EBITDA declined to C$59 million against the C$64.9 million seen in Q1 2022.

The drop in earnings year-over-year is due to increased operational costs from inflation, a lower gross margin (which fell by 73 basis points), and higher expenses, combined with a lack of the previous year’s COVID-19 income support.

Is NWC Stock a Buy, According to Analysts?

NWC stock earns a Hold rating on TipRanks based on three Holds assigned in the past three months. Moreover, NWC stock’s average price target of C$40.33 implies upside potential of 17.75%.

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