NSLC Releases First Quarter Financial Performance

Halifax, August 24, 2021 ­­– The NSLC released its first quarter financial results today (April 1, 2021 – July 4, 2021), reporting an 11.9% increase in earnings for a total of $71.7 million.

“The NSLC team has done a tremendous job working hard to responsibly serve our customers, expand the cannabis network, support community-based initiatives and focus on major projects to improve our service offering this quarter,” said Greg Hughes, NSLC President & CEO.

Total sales for the quarter were up 15.0% to $211.8 million, with an increase in both beverage alcohol and cannabis sales. Overall sales increases can be attributed to 12 extra selling days (due in part to Sunday closures last year), increased store hours (due to pandemic restrictions this time last year) and the addition of 19 new cannabis stores (seven of which opened this quarter).

There was a 12.2% increase in beverage alcohol sales this quarter to $187.1 million and 42.7% increase in cannabis sales to $24.7 million.  There was a 30.5% increase in the number of store transactions and a 12.8% decrease in the average dollar value of each transaction, indicating a gradual return to pre-pandemic purchasing patterns.

With the loosening of COVID-19 restrictions during the quarter, sales to Licensees were up 238.5% or $3.7 million compared to the same time last year. Sales to Private Wine and Specialty Stores were up 80.7% as they ordered more products through the NSLC. Sales to Agency stores were down 3.1%.

“We’re extremely pleased to see that sales to bars, pubs, and restaurants have started to recover as Nova Scotia moves through its phased approach to reopening,” said Greg Hughes, President & CEO.

Sales of local products increased in every category as customers continue to support innovative products offered by our local industry partners. Sales of local beverage alcohol and cannabis increased 34.5% overall to $26.3 million, with craft beer leading the growth in local beverage alcohol at 39.1%.

Local cannabis saw very strong growth with an 85.2% increase in sales. We carry products from more local producers than we did this time last year, and two local producers now offer the popular 28-gram packages. We also continued to develop our cannabis network throughout the quarter, adding seven new stores to our network to offer Nova Scotians an expanded safe supply of cannabis.

The average price per gram decreased by 16% to $6.49, making NSLC cannabis prices more competitive with the illicit market. This reduction was due to customers purchasing 28-gram pack sizes and large pack pre-rolls that carry a lower price per gram, as well as price reductions.

“I’m proud of our people for coming together for the good of Nova Scotia and our communities,” Hughes said. These efforts included raising $461,808 with the support of our partners and customers for the IWK Foundation, providing a $25,000 sponsorship to Habitat for Humanity and a $5,000 sponsorship for the East Coast Music Awards.

Q1 Business Highlights

  • Our diligent front-line employees asked customers who appeared to be under the age of 30 for valid photo ID 605,884 times and refused service 5,662 times.
  • Together with the support of our team, customers, and supplier partners, we were proud to donate $461,808 to help the IWK Foundation. This was the second largest workplace fundraising campaign in Atlantic Canada. Eleven Agency stores and Bishops Cellar took part in the fundraising for the first time in our IWK campaign history.
  • Launched our new Community Investment program to help us to better support Nova Scotia organizations that are working to build healthy and sustainable communities across the province. The program also supports NSLC employees in getting involved and giving back to causes that are personally meaningful to them.
  • Renovated three beverage alcohol stores:
    • Berwick, Mahone Bay, Sydney Mines,
  • Opened seven new cannabis stores:
    • Bayers Lake, Berwick, Mahone Bay, New Waterford, Novalea Drive in Halifax, Sydney Mines, Welton Street in Sydney
  • Reduced the average price per gram of cannabis 16% compared to the previous fiscal year.

Financial Highlights (compared to the same period last year):

  • Net income (earnings) totaled $71.7 million; up $7.6 million or 11.9%.
  • Total sales were $211.8 million; an increase of $27.7 million or 15.0%, due to increases in both beverage alcohol and cannabis sales.
  • Cannabis sales were $24.7 million, an increase of 42.7%.
  • Beverage alcohol sales were $187.1 million, an increase of 12.2%.
  • Retail customer transactions (purchases) for beverage alcohol were up 25.7% and the average dollar value of each transaction decreased by 12.3% to $39.20.
  • The total volume of beverage alcohol sold was up 10.3%.
  • Retail customer transactions for cannabis were up 74.4% and the average dollar value of each transaction decreased by 18.2% to $40.84 as the average price per gram went down 16% and customers purchased more larger package sizes that carry a lower price per gram.

Local Product Sales Highlights

Beverage Alcohol

  • Nova Scotia Craft Beer led the growth in local product sales with a 39.1% increase in sales to $6.7 million. We now list products from 33 local breweries, up from 10 breweries five years ago.
  • Nova Scotia wine saw strong growth of 25.9% to $3.3 million.
  • Nova Scotia Ready to Drink products saw growth of 20.9% to $8.7 million.
  • Nova Scotia spirit sales experienced consistent growth of 19.2% to $2.7 million.

Cannabis

  • Nova Scotia cannabis sales led the growth in local products with 85.2% growth in sales to $4.9 million.
  • Nova Scotia cannabis accounts for 19.7% of all cannabis sales.
 
 
Q1 2021/2022 2020/2021
Sales Volume (Hectolitres) 230,685 209,092
Spirits $47,073,964 $44,192,393
Wine 38,050,021 33,495,011
Beer 75,127,992 67,425,990
Ready-To-Drink 26,848,891 21,702,739
 Cannabis  24,706,653  17,317,622
Non-Liquor 20,372 41,168
Total Sales by Category $211,827,894 $184,174,924
Gross Profit $105,453,351 $95,231,090
Store Operating Expenses (20,806,471) (18,170,233)
Gross Operating income $84,646,880 $77,060,857
Other Corporate Expenses & Other earnings (12,919,607) (12,942,896)
Income from Operations $71,727,273 $64,117,962

 

Sales by Channel Sales Change
NSLC Stores $181.7 M $22.6 M (14.2%)
Licensees (bars/restaurants/pubs) $5.2 M $3.7 M (238.5%)
Agency Stores (independently owned) $18.5 M $0.6 M (-3.1%)
Private Wine and Specialty Stores $5.4 M $2.4 M (80.7%)
Other Wholesale $0.2 M $0.1 M (65.9%)
Online $0.8 M $0.5 M (-39.0%)

 

Operating Expense Ratio

The NSLC’s operating expense ratio for the fiscal quarter, including amortization and depreciation, was 15.9% compared to 16.9% reported the prior year.

Board Expenses

The NSLC released the Board of Directors’ expenses for the fiscal year. These expenses amounted to $0.12 per Director, per day. An electronic version of these expenses is available HERE. 

About the NSLC

The NSLC manages the safe and responsible sale of beverage alcohol and cannabis in Nova Scotia, returning 100% of its profits to government to help fund key public services. The NSLC aspires to be a trusted retailer, partner, employer, and responsible industry steward that is helping to create a stronger Nova Scotia. For more information about the NSLC, please click HERE.

For more information please contact:

Beverley Ware

Communications and Media Relations Manager

beverley.ware@myNSLC.com

O: (902) 450-5920

M: (902) 456-5040