Halifax, October 29, 2019 – The NSLC experienced a solid second quarter with earnings growth of 5.2%, impacted by cannabis sales which did not commence until the third quarter of last year.
Total sales for the second quarter (July 1 – September 29, 2019) were $203.7 million, an increase of 11.8% over the second quarter of the previous fiscal year, primarily due to cannabis.
“I am very pleased with our business and financial performance this quarter,” said Greg Hughes, President & CEO. “Cannabis was clearly the main driver of our overall sales growth; however, beverage alcohol also had an impact, reporting a 1.8% increase.”
In addition to its solid financial performance, the NSLC continued to focus on its corporate social responsibility mandate this quarter. The team initiated partnerships with Feed Nova Scotia and Habitat for Humanity and supported the Children’s Wish Foundation’s Heroes Challenge, raising sufficient funds to support two children’s wishes.
“I’m extremely proud of our people and the support they give these vital organizations that work so hard to provide food, comfortable homes and to help make wishes come true for sick children across the Province,” Hughes said.
Employees continued to be vigilant with responsible retailing efforts, asking for ID more than 650,000 times from customers who appear to be under the age of 30.
Financial Highlights (compared to the same period last year):
- Net income (earnings) totaled $73.8 million; up $3.7 million or 5.2%.
- Total sales were $203.7 million; an increase of $21.5 million or 11.8%, primarily due to cannabis which generated $18.2 million in sales.
- Beverage alcohol sales were $185.5 million, an increase of 1.8%.
- Retail customer transactions (purchases) for beverage alcohol were up 0.2%, and the average dollar value of each transaction grew by 1.8% to $31.83.
- The total volume of beverage alcohol sold was down 0.9%.
- Retail customer transactions for cannabis totaled 538,752; with an average dollar value of $33.76.
| Q2 |
2019/2020 |
2018/2019 |
| Sales Volume (Hectolitres) |
237,116 |
239,383 |
| Spirits |
$43,475,815 |
$43,189,775 |
| Wine |
39,605,225 |
38,817,066 |
| Beer |
81,816,965 |
83,555,929 |
| Ready-To-Drink |
20,607,265 |
16,608,299 |
| Cannabis |
18,188,645 |
- |
| Non-Liquor |
29,052 |
29,552 |
| Total Sales by Category |
$203,722,967 |
$182,200,620 |
|
|
|
| Gross Profit |
$104,070,250 |
$98,070,552 |
| Store Operating Expenses |
(18,265,337) |
(17,618,368) |
| Gross Operating income |
$85,804,913 |
$80,452,184 |
| Other Corporate Expenses & Other earnings |
(12,026,007) |
(10,329,998) |
| Income from Operations |
$73,778,907 |
$70,122,186 |
Sales by Channel
| Channel |
Sales |
Change |
| NSLC Retail Stores |
$169.1M |
$21.3M (14.4%) |
| Licensees (bars/restaurants/pubs) |
$14.5M |
$0.6M (4.2%) |
| Agency Stores (independently owned) |
$15.6M |
$0.02M (0.1%) |
| Private Wine and Specialty Stores |
$3.9M |
$0.6M (16.5%) |
| Other Wholesale |
$0.2M |
$0.05M (27.6%) |
| Online |
$0.3M |
$0.2M (235.8%) |
Operating Expense Ratio
The NSLC’s operating expense ratio for the quarter, including amortization and depreciation, was 14.9 % compared to 15.3% reported the prior year.
Board Expenses
The NSLC released the Board of Directors’ expenses for the first quarter. These expenses amounted to $3.81 per Director, per day. An electronic version of these expenses are available here.
Business Highlights
- Renovations in our Amherst Mall and Yarmouth stores were completed and a new store in Aulds Cove was opened.
- Modifications to our 12 cannabis stores commenced to accommodate edibles, extracts and topicals, which we expect to begin offering in late December.
- Retail employees challenged customers for identification 651,409 times and refused service 5,784 times for failing to have valid photo ID.
- Cabbioke, the NSLC’s campaign designed to create awareness to enjoy beverage alcohol responsibly, attended 59 community events, parades and stores with the support of 83 employee volunteers.
- Employees participated in the Heroes Challenge in support of Children’s Wish Foundation, raising sufficient funds to support two children’s wishes. The NSGEU which represents many NSLC employees generously supported NSLC’s efforts.
Local Product Sales Highlights
The growth in local industry continues to be strong as producers create innovative products and expand their businesses and quality offerings.
- Nova Scotia ready-to-drink products had a strong quarter with sales increasing by 120.3% to $6.2 million. This strong growth was driven by coolers and ciders.
- Nova Scotia craft beer sales grew by 18.9% to $6.2 million. The NSLC now lists products from 30 local breweries, up from six breweries just six years ago.
- Nova Scotia spirit sales grew by 17.4% to $2.5 million. This category has experienced steady growth over the last couple of years.
- Nova Scotia wine sales grew by 2.9% to $3.9 million.
- Nova Scotia produced cannabis accounted for 19.9% of cannabis sales this quarter.
- The NSLC is proud to support local producers across all product categories as they continue to innovate and offer high quality products.
About the NSLC
The NSLC manages the safe and responsible sale of beverage alcohol and recreational cannabis in Nova Scotia, returning 100% of its profits to government to help fund key public services. As a true partner in our communities, the NSLC conducts its business with integrity and respect for the environment, while supporting the growth of local industry. For more information about the NSLC, please click here.
For more information please contact:
Beverley Ware
Communications Advisor
beverley.ware@myNSLC.com
O: (902) 450-5920
M: (902) 456-5040