Leon's Furniture (LNF) Q1 2026 earnings summary

Executive summary

• Revenue declined 3.8% year-over-year to CAD 557.2 million, impacted by normalization in furniture, macroeconomic headwinds, and unfavorable weather.

• Same-store sales fell 4.2%, with system-wide sales down 3.5% to $672.0 million, but market share increased in key categories.

• Gross margin expanded 21 basis points to 44.8%, driven by favorable mix, improved appliance rates, and disciplined promotional activity.

• Mattress category delivered mid-single-digit growth, offsetting declines in furniture, appliances, and electronics.

• Adjusted net income was CAD 20.1 million, down from CAD 24.1 million last year, but above pre-normalization levels.

Financial highlights

• Revenue: CAD 557.2 million (down 3.8% year-over-year).

• Gross margin: 44.8%, up 21 basis points year-over-year.

• Adjusted net income: CAD 20.1 million (down 16.6% year-over-year).

• Adjusted diluted EPS: CAD 0.29 (down 17.1% year-over-year).

• SG&A as % of revenue increased to 39.48% due to fixed cost leverage and higher commissions.

Outlook and guidance

• Consumer caution and value focus expected to persist into Q2, with gradual improvement anticipated in the back half of the year as comps ease.

• Four franchise store openings planned for Q2, with additional corporate and franchise stores expected later in the year.

• Commercial segment moderation expected to occur more slowly due to competitor exit and builder activity delays.

• Focus remains on increasing market share and profitability through disciplined cost management and continued investment in growth initiatives.

• Plans to drive more customers to eCommerce and 299 store locations across Canada.