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Leon's Furniture
(TSX:LNF)
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Rating:67Neutral
Price Target:
C$26.00
▲(8.97% Upside)
Action:Reiterated
Date:08/10/26
The score reflects solid underlying financial health (stable margins, manageable leverage, improved recent free cash flow) as the primary support, plus attractive valuation (low P/E and high dividend yield). Offsetting these positives are weak technicals (price below key moving averages with subdued momentum) and a cautious near-term outlook from the earnings call, including continued sales/EPS pressure and freight/inventory headwinds.
Positive Factors
Strong liquidity
A large unrestricted liquidity pool (~$560M) gives the company durable financial flexibility to fund operations, support inventory and delivery, execute the REIT option or opportunistic M&A, and sustain dividends/share buybacks during cyclical retail softness. That buffer reduces refinancing and short-term cash risk over coming quarters.
Negative Factors
Top-line decline
Sustained revenue declines reduce operating leverage, pressuring SG&A as a percent of sales and limiting room for margin expansion. If the top-line weakness persists it could erode free cash flow resilience, constrain reinvestment, and force more promotional activity that weakens structural profitability over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong liquidity
A large unrestricted liquidity pool (~$560M) gives the company durable financial flexibility to fund operations, support inventory and delivery, execute the REIT option or opportunistic M&A, and sustain dividends/share buybacks during cyclical retail softness. That buffer reduces refinancing and short-term cash risk over coming quarters.
Read all positive factors
Leon's Furniture (LNF) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$1.68B
Dividend Yield5.96%
Average Volume (3M)30.50K
Price to Earnings (P/E)10.6
Beta (1Y)0.81
Revenue Growth-0.15%
EPS Growth-2.29%
CountryCA
Employees8,215
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)2.30
Shares Outstanding68,751,390
10 Day Avg. Volume22,793
30 Day Avg. Volume30,505
Financial Highlights & Ratios
PEG Ratio6.88
Price to Book (P/B)1.52
Price to Sales (P/S)0.74
P/FCF Ratio8.59
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$27.83Price Target Upside16.65% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)2.24
Revenue Forecast (FY)C$2.58B
Leon's Furniture Business Overview & Revenue Model
Company Description
Leon's Furniture Limited, encompassing its various subsidiaries, operates as a prominent Canadian retailer offering a wide array of home furnishings, mattresses, appliances, and electronics. The company also extends its appliance sales to the comm...
How the Company Makes Money
LNF primarily makes money by selling home-related durable goods to consumers through its retail banners (including Leon’s and The Brick) via in-store and online transactions. Key revenue streams include (1) merchandise sales across major product c...
Leon's Furniture Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Neutral
The call painted a balanced picture: the company demonstrated operational resilience (strong liquidity, mattress growth, digital momentum, disciplined cost control, shareholder returns and strategic store/marketing investments) while facing notable top-line pressure (revenue and EPS declines), category-specific weakness (furniture and appliances), promotional trade-downs and supply-chain/freight headwinds that could affect Q3 delivery and margins. Management expressed cautious optimism for the back half with favorable Q4 comps but emphasized ongoing uncertainty.Positive Updates
Strong Liquidity Position
Unrestricted liquidity of $560.1 million (cash, marketable securities and undrawn revolver) providing flexibility to invest, navigate volatility and act opportunistically.
Negative Updates
Revenue Decline
Revenue for Q2 was $631.2 million, down 2.0% year-over-year, reflecting a cautious, value-focused consumer and tough comparisons to a strong prior-year quarter.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Liquidity Position
Unrestricted liquidity of $560.1 million (cash, marketable securities and undrawn revolver) providing flexibility to invest, navigate volatility and act opportunistically.
Read all positive updates
Company Guidance
Guidance was cautious but constructive: Q2 revenue was $631.2M (down 2%) with system‑wide sales down 2% and same‑store sales down 2.2%; gross margin was 44.63% (‑19 bps), SG&A 36.85% (+47 bps), adjusted net income $34.8M and adjusted diluted EPS $0.51 (vs $39.4M / $0.57 LY), and unrestricted liquidity stood at $560.1M; management noted delivered retail units and online sessions/sales were up, mattress sales grew mid‑single digits while furniture was down 4.2% (after +6% LY) and appliances were down low single digits, opened 4 franchise stores, repurchased ~120,000 shares for ~$3M, and disclosed a $1.17B real‑estate appraisal. For the back half they are planning prudently: July showed early “green shoots” in traffic and average sales, comps ease into Q4 (Q4 set up most favorably), but tightened freight/container rates and inventory delays could pressure Q3 delivery and margins (higher landed costs to be worked into back‑half pricing/strategy); REIT timing remains subject to market conditions and regulatory approvals.Leon's Furniture Financial Statement Overview
Summary
Income Statement
64
Positive
Balance Sheet
73
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.54B | 2.57B | 2.50B | 2.45B | 2.52B | 2.51B |
| Gross Profit | 1.06B | 1.05B | 1.11B | 1.08B | 1.11B | 1.11B |
| EBITDA | 331.69M | 330.59M | 334.36M | 318.45M | 372.20M | 401.14M |
| Net Income | 157.84M | 157.05M | 153.67M | 138.85M | 179.43M | 207.16M |
Balance Sheet | ||||||
| Total Assets | 2.45B | 2.48B | 2.34B | 2.22B | 2.19B | 2.45B |
| Cash, Cash Equivalents and Short-Term Investments | 366.81M | 415.40M | 325.41M | 187.15M | 225.96M | 489.95M |
| Total Debt | 478.10M | 475.25M | 425.55M | 453.93M | 557.23M | 456.25M |
| Total Liabilities | 1.20B | 1.22B | 1.20B | 1.19B | 1.26B | 1.66B |
| Stockholders Equity | 1.25B | 1.26B | 1.14B | 1.03B | 928.88M | 791.19M |
Cash Flow | ||||||
| Free Cash Flow | 272.85M | 222.95M | 285.16M | 208.69M | -13.54M | 297.36M |
| Operating Cash Flow | 308.04M | 262.35M | 344.97M | 253.31M | 14.30M | 313.75M |
| Investing Cash Flow | -45.64M | -51.30M | -67.88M | -5.45M | -36.70M | 16.21M |
| Financing Cash Flow | -194.25M | -145.04M | -168.60M | -280.25M | -244.60M | -316.46M |
Leon's Furniture Technical Analysis
Neutral
23.86
Price Trends
24.22
Positive
24.77
Negative
25.88
Negative
Market Momentum
0.11
Negative
51.96
Neutral
71.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LNF, the sentiment is Neutral. The current price of 23.86 is below the 20-day moving average (MA) of 24.33, below the 50-day MA of 24.22, and below the 200-day MA of 25.88, indicating a neutral trend. The MACD of 0.11 indicates Negative momentum. The RSI at 51.96 is Neutral, neither overbought nor oversold. The STOCH value of 71.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:LNF.
Leon's Furniture Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | C$1.68B | 10.61 | 12.76% | 6.12% | -0.15% | -2.29% | |
66 Neutral | C$403.40M | 9.20 | 7.97% | 2.85% | -0.75% | 52.17% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | C$10.40B | 15.43 | 11.53% | 3.26% | 1.05% | -6.66% |
* Consumer Cyclical Sector Average
TSE:LNF
Leon's Furniture
24.49
-3.93
-13.82%
TSE:GBT
BMTC Group Inc.
12.81
-0.16
-1.27%
TSE:CTC
Canadian Tire
226.96
-14.52
-6.01%
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.