NSLC Releases Second Quarter Financial Results

Halifax, October 26, 2021 ­­– The NSLC released its second quarter financial results today (July 5, 2021 – October 3, 2021), reporting an 0.8% increase in earnings for a total of $78.4 million.

“I’m very proud of our people across the NSLC as they continue to support our communities and our customers and responsibly deliver on our mandate in an evolving pandemic landscape” said Greg Hughes, NSLC President & CEO. “Our teams continue to work hard to ensure our employees and our customers are safe”.

Total sales for the quarter were up 5.1% to $227.6 million, with an increase in both beverage alcohol and cannabis sales. Overall sales increases can be attributed to three extra selling days due to Sunday closures last year, increased store hours due to pandemic restrictions in Q2 last year, and the addition of 18 new cannabis stores (two of which opened this quarter).

There was a 3.3% increase in beverage alcohol sales this quarter to $201.0 million and 20.4% increase in cannabis sales to $26.6 million. 

“We continue to see a gradual return to pre-pandemic purchasing patterns in Q2,” Mr. Hughes said. This is reflected by a 7.3% increase in the number of transactions, and a 1.4% decrease in the average dollar value of those transactions. 

Sales to licensees recovered from the prior year with a 42.4% increase to $11.9 million. Sales to Private Wine and Specialty stores increased 62.2% to $5.9 million while sales to Agency stores decreased 12.1% to $18.1 million compared to the prior year.

“We’re pleased to see that sales to bars, pubs, and restaurants recovered from the prior year as the Province progresses though its reopening plan,” said Greg Hughes, President & CEO.

Sales of local products increased in every category as customers continue to support local businesses and the quality, innovative products offered by our local industry partners. Sales of local beverage alcohol and cannabis increased 17.6% overall to $31.1 million, with wine leading the growth in local beverage alcohol at 28.5%.

Local cannabis led the growth in local products overall at 31.6% with $5.5 million in sales. We now carry products from 12 local producers with two of them providing the popular 28-gram pack sizes. We continued to build on our cannabis network this quarter, adding two new stores for a total of 33 as we work to improve access to a safe supply of cannabis across the province.

The average price per gram decreased by 13% to $6.50, 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 general price reductions across several categories.

“In this quarter, our amazing people came together to foster a culture of belonging and supported a number of community initiatives,” Hughes said. These efforts included Pride flag raising at Head Office and Pride sponsorships, working with our customers and partners to donate enough money through Feed Nova Scotia to provide 95,000 meals, and being the top fundraiser in Nova Scotia for the Heroes Challenge, which makes wishes come true for children through Make-A-Wish Canada.

Q2 Business Highlights

  • Our diligent front-line employees asked customers who appeared to be under the age of 30 for valid photo ID 636,857 times and refused service 5,521 times.
  • We were pleased to recognize Pride with a flag raising at Head Office and sponsorships for Halifax Pride Festival, Lunenburg Pride Society, Truro Pride Society and Pride Cape Breton Society, totaling $8,000.
  • Together with the generous support of our teams, customers, and partners, we were proud to donate $62,441.50 to Feed Nova Scotia, providing 95,000 meals.
  • Together with our partners and the generous support of Local 470 NSGEU, we contributed$40,000 to Heroes Challenge – the most of any team in Nova Scotia.
  • Team members volunteered 160 hours with 11 non-profit organizations across the province under our new Together for Good Program in which employees receive support from the NSLC for their volunteer work.

     

  • Opened two new cannabis stores:
    • Larry Uteck in Halifax and Lunenburg
  • Reduced the average price per gram of cannabis 13% compared to the previous fiscal year.

Financial Highlights

(compared to the same period last year):

  • Net income (earnings) totaled $78.4 million; up $0.6 million or 0.8%.
  • Total sales were $227.6 million; an increase of $11.0 million or 5.1%, due to increases in both beverage alcohol and cannabis sales.
  • Cannabis sales were $26.6 million, an increase of 20.4%.
  • Beverage alcohol sales were $201.0 million, an increase of 3.3%.
  • Retail customer transactions (purchases) for beverage alcohol were up 3.8% and the average dollar value of each transaction decreased by 1.9% to $37.68.
  • The total volume of beverage alcohol sold was down 0.3%.
  • Retail customer transactions for cannabis were up 36.6% and the average dollar value of each transaction decreased by 11.9% to $38.85 as the average price per gram went down 13% and customers purchased larger package sizes that carry a lower price per gram as well as price reductions.

Local Product Sales Highlights

Beverage Alcohol

  • Nova Scotia wine led the growth in local beverage alcohol product sales with a 28.5% increase in sales to $4.7 million.
  • Nova Scotia beer saw strong growth of 22.9% to $7.7 million.
  • Nova Scotia spirit sales saw growth of 19.6% to $3.2 million.
  • Nova Scotia Ready to Drink sales experienced growth of 3.4% to $10.0 million.

Cannabis

  • Nova Scotia cannabis sales led the growth in local products with 31.6% growth in sales to $5.5 million.
  • Nova Scotia cannabis accounts for 20.6% of all cannabis sales.

 

Q2 2021/2022 2020/2021
Sales Volume (Hectolitres) 245,800 246,462
Spirits 48,802,397 47,797,719
Wine 42,635,146 36,981,832
Beer 78,631,518 80,143,219
Ready-To-Drink 30,877,160 29,561,904
Cannabis 26,628,456 22,125,153
Non-Liquor 29,928 1,969
Total Sales by Category $227,604,605 $216,611,796
Gross Profit $112,507,953 $110,298,838
Store Operating Expenses (21,207,635) (19,966,426)
Gross Operating income $91,300,318 $90,332,412
Other Corporate Expenses & Other earnings (12,918,612) (12,541,173)
Income from Operations $78,381,706 $77,791,239
   
Sales by Channel Sales Change
NSLC Stores $191.0 M $7.8M (4.3%)
Licensees (bars/restaurants/pubs) $11.9 M $3.6M (42.4%)
Agency Stores (independently owned) $18.1 M $2.5M (-12.1%)
Private Wine and Specialty Stores $5.9 M $2.3 M (62.2%)
Other Wholesale $0.2 M $0.07 M (49.8%)
 Online $0.4 M $0.2 M (-30.8%)

Operating Expense Ratio

The NSLC’s operating expense ratio for the fiscal quarter, including amortization and depreciation, was 15.0%, on par with the prior year.

Board Expenses

The NSLC released the Board of Directors’ expenses for the fiscal year. These expenses amounted to $3.11 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