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North West Company (TSE:NWC)
TSX:NWC
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North West
(TSX:NWC)
80Outperform
Positive Factors
Company Initiatives
The company's Next 100 initiative is anticipated to contribute positively to earnings, outpacing investments through the coming years.
Earnings
The Q4 earnings were higher than expected, driven by strong same-store sales growth and gross margin expansion.
Long-term Growth Drivers
Settlement payments related to First Nations programs are expected to support sales growth, providing longer-term demand tailwinds.
Negative Factors
Stock Performance
Analyst recommends upgrading North West Company to Outperform with an increased target price, seeing an attractive entry point with the stock down approximately 12%.
North West (NWC) vs. S&P 500 (SPY)
Market Cap
C$2.51B
Dividend Yield3.02%
Average Volume (3M)146.34K
Price to Earnings (P/E)18.2
Beta (1Y)0.16
Revenue Growth4.23%
EPS Growth6.08%
CountryCA
Employees7,382
SectorUtilities
Sector Strength86
IndustryGrocery Stores
Share Statistics
EPS (TTM)0.89
Shares Outstanding47,871,258
10 Day Avg. Volume217,704
30 Day Avg. Volume146,338
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.87
Price to Cash Flow (P/CF)11.50
P/FCF Ratio38.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$60.50Price Target Upside11.81% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
North West Business Overview & Revenue Model
Company DescriptionThe North West Company Inc., through its subsidiaries, engages in the retail of food and everyday products and services to rural communities and urban neighborhood markets in northern Canada, rural Alaska, the South Pacific, and the Caribbean. The company's Canadian operations comprise 118 Northern stores, which offers food, financial services, and general merchandise; 5 NorthMart stores that provides fresh foods, apparel, and health products and services; 26 Quickstop convenience stores that provides ready-to-eat foods, and fuel and related services; 5 Giant Tiger junior discount stores, which offers family fashion, household products, and food; 2 Valu Lots discount center and direct-to-customer food distribution outlet; 1 solo market, a store in remote market; 3 Pharmacy and Convenience stores; and 1 North West Company motorsports dealership offering sales, service, parts and accessories for Ski-doo, Honda, Can-am and other premier brands. The Canadian operations also provides contract tele-pharmacist services to rural hospitals and health centers; water and air-based transportation services; and produce and fresh meats to independent grocery stores. Its international operations include 30 Alaska Commercial Company stores that provides food and general merchandise to remote and rural regions; 12 Cost-U-Less mid-size warehouse stores, which offers discount food and general merchandise; 4 Quickstop convenience stores; 9 Riteway food markets; and Pacific Alaska wholesale, a distributor to independent grocery stores, commercial accounts, and individual households in rural Alaska. The North West Company Inc. was founded in 1668 and is headquartered in Winnipeg, Canada.
How the Company Makes MoneyNorth West Company makes money primarily through the sale of groceries and general merchandise at its retail locations. The company's revenue streams include direct sales from its network of stores, which cater to underserved and remote communities. NWC leverages its strategic supply chain and logistics capabilities to manage costs and ensure the availability of products in challenging environments. Additionally, the company benefits from close relationships with local communities and governments, which can enhance market penetration and customer loyalty. Furthermore, NWC might enter into partnerships with local businesses and authorities to expand its service offerings and improve infrastructure, thereby creating additional revenue opportunities.
North West Financial Statement Overview
Summary
North West demonstrates strong financial health with consistent revenue growth and solid margins. The balance sheet shows a prudent leverage strategy and effective equity utilization. Cash flow metrics reflect strong cash generation and efficient management of operational funds.Income Statement
North West has shown consistent revenue growth over the years, with a notable increase in total revenue from 2024 to 2025. The gross profit margin for the latest annual report is approximately 33.71%, indicating stable profitability. The net profit margin has slightly improved from 5.23% in 2024 to 5.33% in 2025, reflecting efficient cost management and operational efficiency. EBIT and EBITDA margins of 8.13% and 12.64% respectively in 2025 show strong operational performance.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio for 2025 stands at 0.55, showing a balanced approach to leveraging. The return on equity (ROE) improved to 17.79% in 2025, indicating effective use of equity to generate profits. An equity ratio of 50.54% suggests a solid equity base, ensuring stability and reducing insolvency risk.78
Positive
Cash Flow
North West's cash flow from operations is strong, with a 13.11% increase in operating cash flow from 2024 to 2025. Free cash flow also grew by 6.78% in the same period, demonstrating good cash generation capability. The operating cash flow to net income ratio is robust, indicating efficient cash conversion from earnings.82
Very Positive
| Breakdown | ||||
| Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.58B | 2.47B | 2.35B | 2.25B | 2.36B | Gross Profit |
| 868.32M | 704.14M | 747.91M | 737.75M | 774.55M | EBIT |
| 209.55M | 195.90M | 180.31M | 220.43M | 209.35M | EBITDA |
| 325.61M | 301.40M | 278.99M | 311.46M | 301.05M | Net Income Common Stockholders |
| 137.30M | 129.39M | 122.19M | 154.80M | 139.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 67.39M | 53.36M | 58.81M | 49.43M | 71.54M | Total Assets |
| 1.53B | 1.40B | 1.34B | 1.22B | 1.19B | Total Debt |
| 422.18M | 405.47M | 402.53M | 349.71M | 402.04M | Net Debt |
| 354.80M | 352.11M | 343.72M | 300.28M | 330.50M | Total Liabilities |
| 732.79M | 690.24M | 688.99M | 639.07M | 685.94M | Stockholders Equity |
| 772.01M | 684.69M | 629.22M | 563.63M | 491.30M |
| Cash Flow | Free Cash Flow | |||
| 114.27M | 107.02M | 65.73M | 130.06M | 263.47M | Operating Cash Flow |
| 260.63M | 230.43M | 182.84M | 224.13M | 338.72M | Investing Cash Flow |
| -131.00M | -107.70M | -106.80M | -75.86M | -66.90M | Financing Cash Flow |
| -119.05M | -128.27M | -68.30M | -170.20M | -227.06M |
North West Technical Analysis
Positive
54.11
Price Trends
47.75
Positive
48.36
Positive
47.98
Positive
Market Momentum
1.39
Negative
67.16
Neutral
70.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NWC, the sentiment is Positive. The current price of 54.11 is above the 20-day moving average (MA) of 49.73, above the 50-day MA of 47.75, and above the 200-day MA of 47.98, indicating a bullish trend. The MACD of 1.39 indicates Negative momentum. The RSI at 67.16 is Neutral, neither overbought nor oversold. The STOCH value of 70.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:NWC.
North West Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | C$22.01B | 23.34 | 13.78% | 1.39% | 1.59% | -1.98% | |
80 Outperform | C$2.51B | 18.23 | 18.85% | 3.02% | 4.23% | 6.08% | |
78 Outperform | C$11.20B | 17.05 | 12.64% | 1.69% | 1.05% | -6.94% | |
77 Outperform | C$66.72B | 18.73 | 18.66% | 1.04% | 11.62% | -8.08% | |
65 Neutral | $12.11B | 15.89 | 6.20% | 4.52% | 5.53% | -8.93% |
* Utilities Sector Average
Performance Comparison
TSE:NWC
North West
54.11
15.98
41.91%
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151.12
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DLMAF
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120.79
39.47
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TSE:ATD
Alimentation Couche-Tard Inc
70.37
-4.97
-6.60%
TSE:EMP.A
Empire Co Cl A NV
48.02
16.60
52.83%
TSE:MRU
Metro Inc.
100.31
30.61
43.92%
North West Earnings Call Summary
Earnings Call Date: Apr 9, 2025 | % Change Since: 8.50% | Next Earnings Date: Jun 4, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance in Q4 with significant growth in both Canadian and International operations, driven by increased sales and effective execution of Next 100 initiatives. However, challenges such as rising operating expenses and macroeconomic uncertainties related to tariffs and specific regional markets present potential risks.Highlights
Strong Q4 Financial Performance
Consolidated sales increased by 4.9%, with net earnings rising by 18.9%. Same-store sales increased by 5.5% in food and 5.1% in general merchandise.
Gross Profit and EBIT Growth
Gross profit increased by 9.4% for the quarter, with EBIT rising by 17.5%. The gross profit rate improved by 141 basis points due to changes in the sales blend and effective promotions.
Canadian Operations Success
Canadian operations saw a total sales increase of 2.5% and a 6.7% rise on a same-store basis. Same-store sales in food increased by 7.6% and 3.4% in general merchandise.
International Operations Growth
International sales increased by 3.1%, with same-store sales increases of 2.7% in food and 10% in general merchandise. Favorable economic conditions in the Caribbean contributed positively.
Next 100 Program Impact
The Next 100 operational excellence initiatives started contributing to the bottom line, offsetting some higher costs and leading to benefits that are beginning to ramp up.
Lowlights
Higher Operating Expenses
Selling, operating, and administrative expenses increased by 6.8%, driven by higher staff costs, technology, depreciation, and foreign exchange impacts.
Challenges in Alaska and South Pacific Markets
Wholesale sales in Alaska faced headwinds, along with weaker economic conditions in some commercial fishing communities and South Pacific markets.
Tariff and Macroeconomic Uncertainty
Uncertainty around US Government tariffs and potential retaliatory tariffs by other countries could impact merchandise costs and inflation.
Company Guidance
In the fourth quarter of fiscal year 2024, The North West Company reported a consolidated sales increase of 4.9% and an 18.9% rise in net earnings, driven by a 5.5% growth in same-store food sales and a 5.1% increase in general merchandise. Gross profit surged by 9.4%, with a 141 basis point rise in the gross profit rate due to a favorable sales mix, reduced markdowns, and effective promotions under the Next 100 initiatives. Selling, operating, and administrative expenses grew by 6.8%, influenced by higher staff costs and increased investments in technology. The company incurred $1 million in onetime professional fees related to the Next 100 program, which aims to enhance operational excellence and offset rising costs. In Canada, same-store sales rose by 6.7%, with food sales up 7.6% and general merchandise up 3.4%, aided by First Nations program spending. Internationally, sales grew by 3.1%, with a notable 10% increase in general merchandise sales. Looking ahead, the company anticipates continued benefits from the Next 100 program, despite potential economic headwinds from tariffs and market fluctuations.North West Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
North West Company Reports Strong Q4 Earnings and Declares Dividend
Positive
Apr 9, 2025
North West Company Inc. reported strong financial performance for the fourth quarter of 2024, with a 4.9% increase in sales driven by same store sales growth and favorable foreign exchange impacts. The company’s Next 100 program has shown early success, enhancing product availability and expanding private label offerings, which is crucial in the current economic climate. The Board declared a quarterly dividend of $0.40 per share, reflecting a continued commitment to shareholder returns. The company’s strategic focus on expanding its private label products and leveraging new technologies positions it well for future growth, benefiting stakeholders and reinforcing its market position.
Spark’s Take on TSE:NWC Stock
According to Spark, TipRanks’ AI Analyst, TSE:NWC is a Neutral.
North West Company Inc. exhibits a strong financial foundation with robust earnings growth, particularly in Canadian operations. The stock is fairly valued with an attractive dividend yield, though it faces challenges from international headwinds and economic uncertainties. Technical indicators suggest a period of consolidation, balancing potential risks with stable financial performance.
To see Spark’s full report on TSE:NWC stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.