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Winnipeg Free Press - PRINT EDITION

Healthy profit increase for North West Company

By: Murray McNeill

Posted: 09/7/2012 1:00 AM | Comments: 0

Michael McMullen (POSTMEDIA NEWS ARCHIVES)

A strong performance by its Canadian division, lower income tax charges and improved inventory control have produced a much brighter profit picture for the North West Company.

The Winnipeg-based discount department store chain has reported a 21.6 per cent jump in net earnings for the three-month period that ended on July 31.

It said earnings climbed to $18.3 million, or 38 cents a share, from $15 million, or 31 cents a share, during the second quarter of last year. Sales were also up by 2.9 per cent to $383.8 million from $372.9 million, while its trading profit, or earnings before interest, income taxes, depreciation and amortization, grew by 12.8 per cent to $36.6 million from $32.4 million.

"This was a strong quarter for delivering on key initiative work," company president and CEO Edward Kennedy said Thursday.

"We were in-stock and ready for business at a higher level than ever before, while our perishable categories continued to benefit from improved ordering and lower waste," he said. "Favourable weather in our Southern Canada stores also helped to offset weaker seasonal income conditions in more remote markets."

NWC said its Canadian sales improved by 1.7 per cent to $262.8 million, versus a 0.4 per cent increase within its international operations, which include stores in Alaska, the South Pacific and the Caribbean.

The company also announced Thursday it has revamped the way it ships products to its stores on Baffin Island, resulting in substantial savings for island residents.

It said it recently began shipping goods directly from its Winnipeg distribution centre, rather than from its distribution hub in Ottawa. The change will result in initial savings of $600,000, and those savings will be passed on to customers in price reductions of 15 per cent or more on 175 key products sold in its 12 Northern and NorthMart stores on the island.

"These price reductions are in addition to $4 million in freight savings that have been directly passed on through to our customers in Nutrition North Canada-eligible communities over the past 12 months," said Michael McMullen, NWC's executive vice-president of Northern Canada retail.

Nutrition North Canada is a federal program that provides subsidies to help reduce the cost of food sold in remote northern communities.

The North West Company is a leading retailer of food and everyday products to rural communities and urban neighbourhoods in Canada, Alaska, the South Pacific and Caribbean.

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition September 7, 2012 B6

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