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Leon's Furniture (TSE:LNF)
:LNF

Leon's Furniture (LNF) AI Stock Analysis

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Leon's Furniture

(TSX:LNF)

Rating:73Outperform
Price Target:
C$32.00
▲(13.96%Upside)
Leon's Furniture displays a robust financial performance, complemented by strategic corporate events that enhance shareholder value. However, technical analysis suggests caution due to overbought conditions, slightly tempering the overall score.
Positive Factors
Earnings
Q1/25 results were above expectations with stronger sales and margins contributing to an increase in adjusted EBITDA.
Financial Strategy
Leon's strong financial position with net cash and available liquidity provides optionality for dividend increases, share buybacks, and M&A.
Market Position
Leon's is well-positioned to manage near-term headwinds and gain share with its strong brand equity and value proposition.
Negative Factors
Consumer Spending
Tariff uncertainties present 2025E risk, introducing downside risk to consumer spending.
Tariff Impact
Tariff uncertainties introduce risk to 2025 expectations.

Leon's Furniture (LNF) vs. iShares MSCI Canada ETF (EWC)

Leon's Furniture Business Overview & Revenue Model

Company DescriptionLeon's Furniture Limited, together with its subsidiaries, operates as a retailer of home furnishings, mattresses, appliances, and electronics in Canada. The company also operates as a commercial retailer of appliances to builders, developers, renovators, hotels, and property management companies. In addition, it offers household furniture, electronics, and appliance repair services; and credit insurance products. The company sells its products through a network of retail stores under the Leon's, The Brick, The Brick Outlet, and The Brick Mattress Store banners; and the Brick's Midnorthern Appliance and Appliance Canada banners, as well as through Websites, including appliancecanada.com, leons.ca, thebrick.com, and furniture.ca. As of December 31, 2021, the company operated 67 Brick franchise stores. Leon's Furniture Limited was founded in 1909 and is headquartered in Toronto, Canada.
How the Company Makes MoneyLeon's Furniture generates revenue primarily through the sale of home furnishings and related products via its retail and online channels. The company's key revenue streams include the sale of furniture, mattresses, appliances, and electronics, with a focus on leveraging its extensive retail network to reach customers. Leon's also benefits from strategic partnerships with leading brands and suppliers, which enhance its product offerings and competitive pricing. Additionally, the company may offer financing options to customers, adding another layer to its revenue model. Factors such as effective supply chain management, marketing strategies, and customer service play significant roles in driving sales and maintaining profitability.

Leon's Furniture Financial Statement Overview

Summary
Leon's Furniture has shown stable revenue growth, strong profitability, and prudent financial management across its income, balance sheet, and cash flow statements. EBIT margins have slightly decreased, but overall financial health remains robust.
Income Statement
78
Positive
Leon's Furniture has demonstrated stable revenue growth with a TTM revenue increase of 0.7% compared to the previous year. The gross profit margin stands strong at 43.5% for TTM, indicating effective cost management. Despite a slight decrease in EBIT margin to 7.9% from 8.0%, the net profit margin remains stable at 6.3%. Overall, the company maintains solid profitability levels.
Balance Sheet
75
Positive
The company shows a healthy financial position with a debt-to-equity ratio of 0.36, reflecting a moderate leverage level. The equity ratio is strong at 50.6%, indicating a stable capital structure. Return on equity is robust at 13.8%, highlighting effective use of shareholders' equity. The balance sheet remains resilient and well-managed.
Cash Flow
80
Positive
Leon's Furniture has achieved a positive free cash flow growth rate of 4.1% for TTM, supported by strong operating cash flows. The operating cash flow to net income ratio is 2.1, and the free cash flow to net income ratio is 1.8, indicating efficient cash generation capabilities. The company exhibits a solid cash flow performance.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.52B2.50B2.45B2.52B2.51B2.22B
Gross Profit
1.09B1.11B1.08B1.11B1.11B983.92M
EBIT
199.20M191.84M293.26M254.74M289.13M232.97M
EBITDA
328.73M334.36M318.45M372.20M409.14M344.19M
Net Income Common Stockholders
158.67M153.67M138.85M179.43M207.16M163.25M
Balance SheetCash, Cash Equivalents and Short-Term Investments
281.93M325.41M187.15M225.96M489.95M490.83M
Total Assets
2.28B2.34B2.22B2.19B2.45B2.42B
Total Debt
415.54M425.55M453.93M557.23M456.25M491.14M
Net Debt
276.48M234.31M371.18M442.10M74.12M122.51M
Total Liabilities
1.13B1.20B1.19B1.26B1.66B1.40B
Stockholders Equity
1.15B1.14B1.03B928.88M791.19M1.02B
Cash FlowFree Cash Flow
280.75M285.16M208.69M-13.54M297.36M466.94M
Operating Cash Flow
341.01M344.97M253.31M14.30M313.75M511.42M
Investing Cash Flow
-69.69M-67.88M-5.45M-36.70M16.21M-43.07M
Financing Cash Flow
-180.08M-168.60M-280.25M-244.60M-316.46M-188.75M

Leon's Furniture Technical Analysis

Technical Analysis Sentiment
Positive
Last Price28.08
Price Trends
50DMA
24.53
Positive
100DMA
24.53
Positive
200DMA
25.92
Positive
Market Momentum
MACD
1.13
Negative
RSI
66.87
Neutral
STOCH
63.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LNF, the sentiment is Positive. The current price of 28.08 is above the 20-day moving average (MA) of 26.95, above the 50-day MA of 24.53, and above the 200-day MA of 25.92, indicating a bullish trend. The MACD of 1.13 indicates Negative momentum. The RSI at 66.87 is Neutral, neither overbought nor oversold. The STOCH value of 63.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:LNF.

Leon's Furniture Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSCTC
76
Outperform
$9.96B16.0714.70%2.70%-1.12%201.58%
TSLNF
73
Outperform
C$1.92B12.0614.49%2.78%0.47%9.41%
TSGBT
65
Neutral
C$416.94M14.165.95%2.79%5.97%174.18%
62
Neutral
$6.84B11.412.80%3.87%2.70%-24.58%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:LNF
Leon's Furniture
28.09
6.39
29.45%
TSE:CTC
Canadian Tire
246.00
16.74
7.30%
TSE:GBT
BMTC Group Inc.
13.03
0.55
4.41%

Leon's Furniture Corporate Events

Executive/Board ChangesShareholder Meetings
Leon’s Furniture Limited Announces Election of Directors
Positive
May 14, 2025

Leon’s Furniture Limited announced the election of its directors during the Annual Meeting of Common Shareholders held on May 8, 2025. All nominee directors listed in the Management Information Circular were elected, indicating strong shareholder support and continuity in leadership, which could positively impact the company’s strategic direction and stakeholder confidence.

The most recent analyst rating on (TSE:LNF) stock is a Hold with a C$30.00 price target. To see the full list of analyst forecasts on Leon’s Furniture stock, see the TSE:LNF Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Leon’s Furniture Achieves Record Q1 Revenue Amid Strong Furniture Sales
Positive
May 8, 2025

Leon’s Furniture Limited reported record Q1 revenue of $579.5 million, a 3.1% increase driven by strong performance in the furniture category and commercial appliance business. The company achieved a 47% increase in adjusted net income, reflecting its commitment to cost control and operational efficiencies. Despite macroeconomic challenges, LFL is well-positioned with $469.7 million in unrestricted liquidity to navigate market headwinds and continue delivering reliable returns to shareholders.

Financial Disclosures
Leon’s Furniture to Announce Q1 2025 Financial Results
Neutral
Apr 10, 2025

Leon’s Furniture Limited announced it will release its financial results for the first quarter of 2025 on May 8, 2025. This announcement is significant for stakeholders as it provides insights into the company’s financial performance and market positioning, potentially impacting investor decisions and market perceptions.

Stock BuybackBusiness Operations and Strategy
Leon’s Furniture Announces Share Repurchase Program
Positive
Mar 19, 2025

Leon’s Furniture Limited has announced the approval of a common share repurchase program on the Toronto Stock Exchange, allowing the company to repurchase up to 3,403,405 common shares, which represents 4.99% of its total issued and outstanding shares. The initiative, which includes an automatic share purchase plan with National Bank Financial Inc., is seen as a strategic move to capitalize on the attractive current share price, potentially enhancing shareholder value and reflecting confidence in the company’s financial position.

Business Operations and Strategy
Leon’s Furniture to Engage at CIBC Retail Conference
Positive
Mar 13, 2025

Leon’s Furniture Limited announced its participation in the 28th Annual CIBC Retail and Consumer Conference on March 26, 2025, where it will engage in a fireside chat and one-on-one meetings. This involvement underscores the company’s active engagement with investors and stakeholders, potentially enhancing its industry positioning and investor relations.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.