Download PDF

1. Company Snapshot

1.a. Company Description

Leon'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.

Show Full description

1.b. Last Insights on LNF

Leon's Furniture Limited's recent performance was driven by strong Q2 2025 financial results, with system-wide sales increasing 4.0% to $771.5 million and revenue rising 4.3% to $644.1 million, fueled by growth in furniture and commercial appliances. The company also announced a 20% increase in quarterly dividend. National Bank of Canada confirmed its outperform rating and raised its target. The Brick, a subsidiary, recently opened a new 43,000-square-foot showroom in Richmond, BC, expanding its presence. These developments underscore the company's solid operational and financial momentum.

1.c. Company Highlights

2. LFL Group's Q3 2025 Earnings: Strong Sales and Margin Expansion

LFL Group reported a robust third quarter 2025, with system-wide and same-store sales increasing 3.7% and 3.9%, respectively. Adjusted diluted earnings per share grew 20.4% year-over-year to $0.65, missing analyst estimates of $0.769. Gross profit margin expanded by 79 basis points year-over-year to 44.6%, driven by higher-margin furniture sales and a focus on strengthening sourcing and vendor relationships. The company's disciplined execution and cost control measures contributed to the improved profitability.

Publication Date: Nov -24

📋 Highlights
  • Top-line Growth:: System-wide sales +3.7% and same-store sales +3.9%, with adjusted diluted EPS rising 20.4% YoY.
  • Margin Expansion:: Gross profit margin widened 79 bps to 44.6%, driven by higher-margin furniture sales and sourcing efficiency.
  • Strong Liquidity:: Ended Q3 with $549.6 million in unrestricted liquidity, including cash and undrawn revolver funds.
  • Insurance Growth:: Warranty and insurance attach rates improved, contributing to double-digit insurance business growth year-to-date.
  • Commercial Channel Success:: Appliance business led by commercial sales, with projects from prior years continuing to deliver results.

Operational Strengths

The company's scale enables it to negotiate directly with suppliers and secure advantaged pricing. Its banners are trusted by Canadians, and its integrated logistics network gives it a level of service differentiation that's difficult for others to replicate. The company's omnichannel infrastructure is instrumental in driving sales, with its digital ecosystem used as a qualification funnel that delivers customers with clear purchase intent.

Furniture and Appliance Sales

Furniture was the standout category, supported by a focused assortment strategy. The overall appliance business was strong, led by the commercial channel, which has been the case for the past several quarters. The company continues to deliver on projects booked over the past couple of years and is working to increase its share of the replacement business, especially with property managers.

Valuation and Outlook

With a P/E Ratio of 11.97 and an EV/EBITDA of 6.55, the company's valuation appears reasonable, considering its consistent financial performance and growth prospects. Analysts estimate next year's revenue growth at 2.3%. The company's focus on disciplined execution, cost control, and strategic investments is expected to drive continued profitability growth and long-term success.

Challenges and Opportunities

The Canada Post disruption is creating near-term headwinds, but the company is drawing on last year's experience to adjust quickly. The company remains confident in its ability to deliver consistent financial performance and drive profitable growth and shareholder value over the long-term. The company's strong online presence and improving attach rates for warranty and insurance products position it well for future growth.

Capital Allocation and M&A

The company's approach to capital allocation remains disciplined and consistent, prioritizing reinvestment in the business, maintaining a strong balance sheet, and returning capital to shareholders over time. The company is opportunistic and will only pursue M&A deals that are in the best interest of growing the business, with criteria including strong management teams, growth potential, and alignment with the company's ecosystem.

3. NewsRoom

Card image cap

Are Leon's Furniture Limited's (TSE:LNF) Fundamentals Good Enough to Warrant Buying Given The Stock's Recent Weakness?

Dec -03

Source:

Card image cap

We Think That There Are Issues Underlying Leon's Furniture's (TSE:LNF) Earnings

Nov -13

Source:

Card image cap

An Intrinsic Calculation For Leon's Furniture Limited (TSE:LNF) Suggests It's 42% Undervalued

Nov -11

Source:

Card image cap

Leon's Furniture Hold Rating Reiterated at Stifel Canada Following Q3 Results; Price Target Kept at C$30.00

Nov -10

Source:

Card image cap

LFL Announces Strong Third Quarter Financial Results

Nov -06

Source:

Card image cap

The Brick Kelowna Celebrates Grand Re-Opening with Exclusive Deals and Special Appearance by Celebrity Designer Kortney Wilson

Oct -16

Source:

Card image cap

LFL Group Schedules Q3 2025 Results Release and Conference Call

Oct -14

Source:

Card image cap

Is It Too Late To Consider Buying Leon's Furniture Limited (TSE:LNF)?

Sep -01

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.50%)

6. Segments

Goods by Corporate Stores

Expected Growth: 2.5%

The 2.5% growth in Goods by Corporate Stores from Leon's Furniture Limited is driven by increasing consumer spending on home furnishings, effective inventory management, and strategic pricing strategies. Additionally, the company's focus on omnichannel retailing, improved customer experience, and targeted marketing initiatives have contributed to the growth.

Extended Warranty

Expected Growth: 2.0%

The 2.0% growth in Extended Warranty from Leon's Furniture Limited is driven by increasing consumer demand for protection plans, rising sales of high-ticket items, and strategic partnerships with manufacturers to offer bundled warranty solutions. Additionally, the company's focus on customer retention and loyalty programs contributes to the growth of this segment.

Franchise

Expected Growth: 3.5%

Leon's Furniture Limited franchise growth of 3.5% is driven by increasing demand for home furnishings, expansion into new markets, and strategic partnerships. Additionally, the company's focus on e-commerce and omnichannel retailing, as well as its diversified product offerings, contribute to its growth momentum.

Insurance Sales

Expected Growth: 2.8%

Leon's Furniture Limited's 2.8% insurance sales growth is driven by increasing demand for protection products, strategic partnerships with insurance providers, and expansion of in-store insurance services. Additionally, the company's focus on customer retention and cross-selling initiatives have contributed to the growth. Furthermore, the rise of online sales and digital platforms has also boosted insurance sales.

Rental Income from Investment Property

Expected Growth: 1.8%

Rental income from Leon's Furniture Limited investment property grew 1.8% driven by increasing demand for retail space, strategic property acquisitions, and effective lease renewal strategies. Additionally, the company's focus on diversifying its tenant base and optimizing property management practices contributed to the growth.

7. Detailed Products

Furniture

Wide range of stylish and comfortable furniture for living rooms, dining rooms, bedrooms, and home offices

Mattresses

High-quality mattresses from top brands, offering comfort and support for a good night's sleep

Appliances

Wide selection of appliances from leading brands, including refrigerators, ovens, dishwashers, and more

Home Decor

Stylish and functional home decor items, including lighting, rugs, and wall art

Bedding and Linens

High-quality bedding and linens from top brands, offering comfort and style

Home Office Furniture

Functional and stylish home office furniture, including desks, chairs, and shelving

8. Leon's Furniture Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Leon's Furniture Limited is medium because while there are some substitutes available in the market, they are not very close to the products offered by Leon's.

Bargaining Power Of Customers

The bargaining power of customers for Leon's Furniture Limited is low because the company has a strong brand image and customers are loyal to the brand.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Leon's Furniture Limited is medium because while the company has some power in negotiating prices, suppliers also have some bargaining power due to the high demand for their products.

Threat Of New Entrants

The threat of new entrants for Leon's Furniture Limited is high because the market is attractive and there are low barriers to entry, making it easy for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry for Leon's Furniture Limited is high because the market is highly competitive and there are many players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 30.62%
Debt Cost 7.71%
Equity Weight 69.38%
Equity Cost 7.71%
WACC 7.71%
Leverage 44.13%

11. Quality Control: Leon's Furniture Limited passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Leons

A-Score: 6.4/10

Value: 7.2

Growth: 5.1

Quality: 6.4

Yield: 7.0

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

View Full Report
Stock-Card
Winmark

A-Score: 6.3/10

Value: 2.8

Growth: 5.0

Quality: 8.4

Yield: 6.0

Momentum: 9.0

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Build-A-Bear Workshop

A-Score: 6.1/10

Value: 5.1

Growth: 6.9

Quality: 7.0

Yield: 5.0

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
Tandy Leather Factory

A-Score: 5.1/10

Value: 9.3

Growth: 3.8

Quality: 6.8

Yield: 5.0

Momentum: 0.5

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
Liquidity Services

A-Score: 4.9/10

Value: 3.8

Growth: 6.1

Quality: 6.8

Yield: 0.0

Momentum: 7.5

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
Sleep Country Canada

A-Score: 3.9/10

Value: 2.2

Growth: 6.2

Quality: 3.8

Yield: 3.0

Momentum: 5.0

Volatility: 3.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

28.85$

Current Price

28.85$

Potential

-0.00%

Expected Cash-Flows