BUSINESS

Giant Tiger operator, North West Company, sees Q4 earnings up due to low costs

03/14/2013 02:08 EDT | Updated 05/14/2013 05:12 EDT
TORONTO - The North West Company Inc. (TSX:NWC) reported Thursday that lower operating and administrative costs helped the retail operator increase its earnings for the fourth quarter.

The Winnipeg-based company, which owns discount chain Giant Tiger and other banners, saw its net income go up to $15.8 million or 32 cents per diluted share for the period ended Jan. 31. That's up 17 per cent from $13.5 million, or 27 cents per diluted share in the prior-year period.

Sales, including foreign exchange, decreased 2.8 per cent to $386.6 million for the quarter, compared with $397.5 million in the same period a year ago, partly due to overall weaker performance for its merchandise and costs from previously announced store closures.

Excluding currency conversion, overall sales were down 1.9 per cent and same-store sales fell 1.2 per cent.

The company also announced it is increasing its quarterly dividend by 7.7 per cent or two cents to 28 cents per share to shareholders on record as of March 28. The dividend will be paid on April 15.

"We were very successful in achieving productivity and shrink reduction improvements in the fourth quarter," said North West president and chief executive Edward Kennedy.

North West says it will continue to forge ahead with expanding its food business, and continue to be more selective on what general merchandise its retailers will carry in the future.

"These have been priorities for the last two years and they will carry forward into 2013. Sales were a disappointment in discretionary general merchandise categories and led to higher mark downs in the quarter," said Kennedy.

"In 2013 we will continue to focus on the growth potential in our food business and be more selective on the general merchandise opportunities we choose to pursue."

North West operates 233 stores under the Giant Tiger, Northern, NorthMart, AC Value Center and Cost-U-Less banners in Canada, Alaska, the South Pacific and the Caribbean with combined annual sales of some $1.5 billion.