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Leon's Furniture (TSE:LNF)
TSX:LNF
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Leon's Furniture
(TSX:LNF)
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Rating:76Outperform
Price Target:
C$33.00
▲(14.46% Upside)
Leon's Furniture's strong earnings call performance and attractive valuation are the most significant factors driving the score. The company's solid financial health and stable technical indicators further support a positive outlook, despite some external challenges.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion.
Profitability Growth
Significant profitability growth reflects efficient operations and cost management, enhancing shareholder value over time.
Gross Profit Margin Expansion
Higher margins from efficient sourcing and product mix boost profitability, indicating sustainable competitive advantage.
Negative Factors
Challenges in Retail Environment
A challenging retail environment can limit pricing power and compress margins, affecting long-term profitability.
Impact of Canada Post Strike
Disruptions in logistics can hinder sales and customer satisfaction, impacting revenue during critical periods.
Slowing Commercial Channel
A slowdown in commercial channels may reduce growth opportunities, affecting future revenue streams.
Leon's Furniture (LNF) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$2.02B
Dividend Yield2.91%
Average Volume (3M)30.50K
Price to Earnings (P/E)12.6
Beta (1Y)0.62
Revenue Growth1.99%
EPS Growth31.36%
CountryCA
Employees8,381
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.65
Shares Outstanding68,269,325
10 Day Avg. Volume22,793
30 Day Avg. Volume30,505
Financial Highlights & Ratios
PEG Ratio1.12
Price to Book (P/B)1.54
Price to Sales (P/S)0.70
P/FCF Ratio6.16
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$33.50Price Target Upside16.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Leon's Furniture Business Overview & Revenue Model
Company DescriptionLeon's Furniture (LNF) is a leading Canadian retailer specializing in furniture, appliances, and electronics. Established in 1909, the company operates numerous locations across Canada, offering a diverse range of products including living room and bedroom furniture, mattresses, home appliances, and consumer electronics. Leon's Furniture is committed to providing quality merchandise at competitive prices, with a focus on customer satisfaction and a seamless shopping experience both in-store and online.
How the Company Makes MoneyLeon's Furniture generates revenue primarily through the sale of furniture, appliances, and electronics. The company employs a multi-channel retail strategy, combining brick-and-mortar stores with an e-commerce platform to reach a wider audience. Key revenue streams include direct sales of home furnishings, financing options for customers, and after-sales services such as delivery and assembly. Additionally, Leon's Furniture benefits from strategic partnerships with various manufacturers and suppliers, allowing them to offer exclusive products and promotions. Seasonal sales events and financing promotions also play a significant role in driving sales during peak buying periods, contributing to the company's overall profitability.
Leon's Furniture Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 25, 2026
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook with strong sales and profitability growth, particularly in the furniture category. The company showcases effective cost management and strategic positioning in a challenging retail environment. However, external factors such as the Canada Post strike and slowing commercial channels present notable challenges.Q3-2025 Updates
Positive Updates
Strong Top Line Performance
System-wide sales increased by 3.7%, revenue grew by 4.1%, and same-store sales rose by 3.9% in Q3 2025, despite a challenging retail environment.
Profitability Growth
Adjusted diluted earnings per share grew 20.4% year-over-year, driven by strong sales, disciplined execution, and cost control measures.
Furniture Category Success
Furniture was the standout category, contributing to higher margins and sales growth, supported by a focused assortment strategy.
Gross Profit Margin Expansion
Gross profit margin expanded by 79 basis points year-over-year to 44.6%, reflecting higher-margin furniture sales and efficient sourcing strategies.
SG&A Improvement
SG&A rate improved by 14 basis points year-over-year to 35.51% of revenue, aided by lower retail financing fees and cost management.
Strong Balance Sheet
The company ended the quarter with $549.6 million in unrestricted liquidity, maintaining financial flexibility for future investments.
Negative Updates
Challenges in Retail Environment
Consumer discretionary spending remains pressured, and the retail environment is highly promotional, impacting sales dynamics.
Impact of Canada Post Strike
The ongoing Canada Post disruption is creating headwinds during a key promotional period, potentially affecting Q4 performance.
Slowing Commercial Channel
Builder pipelines are slowing, and revenue from developers is expected to moderate as the company moves into 2026.
Regional Sales Variability
Ontario and BC experienced softer sales, influenced by flyer distribution challenges and regional economic conditions.
Company Guidance
In the recent earnings call for LFL Group's third quarter of 2025, the company provided several key metrics reflecting its financial performance and strategic initiatives. System-wide sales increased by 3.7%, while same-store sales grew by 3.9% year-over-year. Adjusted diluted earnings per share saw a significant increase of 20.4%, showcasing the company's ability to convert sales momentum into profitability. The gross profit margin expanded by 79 basis points to 44.6%, attributed to higher-margin furniture sales and improved sourcing efficiencies. The SG&A rate improved by 14 basis points to 35.51% of revenue, aided by lower retail financing fees. Despite challenges such as a softer new construction market and continued Canada Post disruptions, LFL Group maintained its retail store count at 300, focusing on optimizing store profitability rather than expanding the number of stores. The company ended the quarter with $549.6 million in unrestricted liquidity, allowing for strategic flexibility. Looking ahead, LFL anticipates continued consumer selectivity in spending but remains confident in its strategic positioning to drive shareholder value.Leon's Furniture Financial Statement Overview
Summary
Leon's Furniture demonstrates solid financial health with consistent revenue growth and strong gross profit margins. The balance sheet is stable with moderate leverage and good equity utilization. Cash flow management is adequate but shows potential for enhancement, particularly in free cash flow growth.Income Statement
Leon's Furniture shows a stable revenue growth trend with a TTM growth rate of 1.05%. The gross profit margin remains strong at 43.49%, indicating efficient cost management. However, the net profit margin is relatively low at 6.31%, suggesting room for improvement in profitability. The EBIT and EBITDA margins are healthy, reflecting good operational efficiency.75
Positive
Balance Sheet
The company maintains a moderate debt-to-equity ratio of 0.36, indicating a balanced approach to leveraging. Return on equity is solid at 14.09%, showcasing effective use of equity capital. The equity ratio stands at 51.06%, suggesting a stable financial structure with a good proportion of assets financed by equity.70
Positive
Cash Flow
Operating cash flow is strong, but free cash flow has seen a decline of 9.71% in the TTM period. The operating cash flow to net income ratio is 0.57, indicating reasonable cash generation relative to net income. The free cash flow to net income ratio is 0.82, reflecting adequate cash flow management, though there is room for improvement.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.54B | 2.50B | 2.45B | 2.52B | 2.51B | 2.22B |
| Gross Profit | 1.14B | 1.11B | 1.08B | 1.11B | 1.11B | 983.92M |
| EBITDA | 340.70M | 334.36M | 318.45M | 372.20M | 409.14M | 344.19M |
| Net Income | 160.34M | 153.67M | 138.85M | 179.43M | 207.16M | 163.25M |
Balance Sheet | ||||||
| Total Assets | 2.30B | 2.34B | 2.22B | 2.19B | 2.45B | 2.42B |
| Cash, Cash Equivalents and Short-Term Investments | 266.82M | 325.41M | 187.15M | 225.96M | 489.95M | 490.83M |
| Total Debt | 430.10M | 425.55M | 453.93M | 557.23M | 456.25M | 491.14M |
| Total Liabilities | 1.12B | 1.20B | 1.19B | 1.26B | 1.66B | 1.40B |
| Stockholders Equity | 1.17B | 1.14B | 1.03B | 928.88M | 791.19M | 1.02B |
Cash Flow | ||||||
| Free Cash Flow | 253.48M | 285.16M | 208.69M | -13.54M | 297.36M | 466.94M |
| Operating Cash Flow | 294.92M | 344.97M | 253.31M | 14.30M | 313.75M | 511.42M |
| Investing Cash Flow | -48.04M | -67.88M | -5.45M | -36.70M | 16.21M | -43.07M |
| Financing Cash Flow | -183.28M | -168.60M | -280.25M | -244.60M | -316.46M | -188.75M |
Leon's Furniture Technical Analysis
Negative
28.83
Price Trends
28.99
Negative
28.46
Positive
26.39
Positive
Market Momentum
0.12
Negative
47.72
Neutral
38.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LNF, the sentiment is Negative. The current price of 28.83 is below the 20-day moving average (MA) of 28.88, below the 50-day MA of 28.99, and above the 200-day MA of 26.39, indicating a neutral trend. The MACD of 0.12 indicates Negative momentum. The RSI at 47.72 is Neutral, neither overbought nor oversold. The STOCH value of 38.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | C$2.02B | 12.56 | 15.07% | 2.91% | 1.99% | 31.36% | |
69 Neutral | $8.89B | 17.65 | 13.16% | 3.11% | -0.13% | 13.73% | |
63 Neutral | C$420.15M | 15.61 | 5.36% | 2.77% | 7.61% | 1.71% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
TSE:LNF
Leon's Furniture
28.83
2.51
9.56%
TSE:GBT
BMTC Group Inc.
13.00
-0.11
-0.86%
TSE:CTC
Canadian Tire
249.75
25.35
11.29%
Leon's Furniture Corporate Events
Business Operations and StrategyFinancial Disclosures
Leon’s Furniture Reports Strong Q3 2025 Financial Results
Positive
Nov 6, 2025
Leon’s Furniture Limited reported strong financial results for the third quarter of 2025, with system-wide sales rising by 3.7% to $808.4 million and revenue increasing by 4.1% to $678.7 million. The company’s strategic focus on furniture and appliances, coupled with improved gross profit margins and operational discipline, contributed to a 19.1% increase in adjusted net income. The results underscore LFL’s effective market positioning and its ability to navigate a competitive retail environment, supported by significant liquidity and a robust balance sheet.
The most recent analyst rating on (TSE:LNF) stock is a Hold with a C$31.00 price target. To see the full list of analyst forecasts on Leon’s Furniture stock, see the TSE:LNF Stock Forecast page.
Financial Disclosures
Leon’s Furniture to Announce Q3 2025 Financial Results
Neutral
Oct 14, 2025
Leon’s Furniture Limited announced it will release its third-quarter financial results for 2025 on November 6, with a conference call scheduled for November 7 to discuss the outcomes. This announcement is significant as it provides stakeholders an opportunity to gain insights into the company’s financial health and strategic direction, potentially impacting its market positioning and investor relations.
The most recent analyst rating on (TSE:LNF) stock is a Hold with a C$31.00 price target. To see the full list of analyst forecasts on Leon’s Furniture stock, see the TSE:LNF Stock Forecast page.
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.