Halifax – October 25, 2022 – The NSLC released its second quarter financial results today (July 4, 2022 – October 2, 2022), reporting a 5.7% increase in earnings for a total of $82.8 million.
“We were pleased to open two new stores this quarter that offer both beverage alcohol and cannabis, expanding our network to 110 corporate stores,” said Greg Hughes, NSLC President & CEO. “Our teams did this while responsibly serving our customers and continuing to create a positive impact in the communities we serve.”
Total sales for the quarter were up 5.2% to $239.4 million with an increase in both cannabis and beverage alcohol sales. There was a 4.8% increase in beverage alcohol sales to $210.5 million and an 8.3% increase in cannabis sales to $28.8 million.
We opened new beverage alcohol and cannabis stores in Timberlea and Eskasoni in September, in addition to a new cannabis store in Windsor for a total of 45 cannabis stores across the province.
“Strong sales growth was reported in every local product category as we continue our efforts to support Nova Scotia producers,” Hughes said. Sales of local beverage alcohol and cannabis increased 20.3% overall to $37.4 million. Nova Scotia farm winery products led the growth in local beverage alcohol at 14.6% to $5.4 million this quarter and Nova Scotia cannabis sales grew 56.5% to $8.6 million.Sales to Licensees were up 19.9% to $14.3 million compared to the same time last year and sales to NSLC Agency stores increased 9.1% to $19.8 million. Sales to Private Wine and Specialty Stores were down 2.6%.We have improved accessibility to cannabis and reduced the average price per gram a further 3.8% to $6.25 compared to the same time last year as we work to impact illicit sales in the province. We also added more local products to our shelves, carrying 139 products from 17 local cannabis suppliers this quarter. Local product now accounts for 29.8% of all cannabis sales – an ongoing trend that continues to grow. Corporate social responsibility is at the core of who we are. Our people volunteered for organizations across Nova Scotia that make a positive impact on the communities they serve, in addition to volunteering with the organizations the NSLC has formal partnerships with, including Habitat for Humanity and Feed Nova Scotia. “I’m proud of a new partnership we had this year with Muin Clothing Co., owned by Derek Lewis of Millbrook First Nation, and Stanfield’s to support the National Day for Truth and Reconciliation,” Hughes said. Through it, the NSLC provided 1,800 orange shirts team members. A dollar from every shirt supports the Na-mi-quai-ni-mak Fund which provides grants to survivors and indigenous communities to commemorate residential schools and sites.
Q2 Business Highlights
- Our diligent front-line employees asked customers who appeared to be under the age of 30 for valid photo ID 596,291 times and refused service 5,000 times.
- The NSLC was the Make-A-Wish Heroes Challenge Top Fundraiser in Nova Scotia for the second year in a row, raising $45,000.
- Together with our team and customers, the NSLC donated $43,334 to the Red Cross in support of the Hurricane Fiona in Canada Appeal.
- Our Feed Nova Scotia pop-up event raised $62,000. Thanks to the support of our customers, these funds will provide an additional 93,000 meals for Nova Scotians.
- Retail, Distribution Centre, and Head Office team members along with their families came together to volunteer at Halifax Pride events.
- 39 team members volunteered for organizations that help create stronger communities across the province.
- We opened two new beverage alcohol and cannabis stores:
- We renovated one store and added a cannabis section:
Financial Highlights
(compared to the same period last year):
- Net income (earnings) totaled $82.8 million; up $4.4 million or 5.7%.
- Total sales were $239.4 million; an increase of $11.8 million or 5.2%, due to increases in both beverage alcohol and cannabis sales.
- Cannabis sales were $28.8 million, an increase of 8.3%.
- Beverage alcohol sales were $210.5 million, an increase of 4.8%.
- Retail customer transactions (purchases) for beverage alcohol were up 0.1% and the average dollar value of each transaction increased by 3.3% to $38.91.
- The total volume of beverage alcohol sold was up 1.1%.
- Retail customer transactions for cannabis were up 8.5% and the average dollar value of each transaction decreased by 0.2% to $38.75. The average price per gram decreased 3.8% compared to the same time last year to $6.25.
Local Product Sales Highlights
Beverage Alcohol
- Nova Scotia wine led the growth in local product sales with a 14.6% increase in sales to $5.4 million.
- Nova Scotia Ready to Drink sales experienced very strong growth of 13.1% to $11.3 million.
- Nova Scotia beer saw strong growth of 12.4% to $8.7 million. We now list products from 36 local breweries, up from 17 breweries five years ago.
- Nova Scotia spirits saw good growth of 8.1% to $3.4 million.
Cannabis
- Nova Scotia cannabis sales again led the growth in local products with a 56.5% increase in sales to $8.6 million.
- Nova Scotia cannabis accounts for 29.8% of all cannabis sales, the largest we have seen to date.
|
Q2
|
2022/2023
|
2021/2022
|
|
Sales Volume (Hectolitres)
|
248,448
|
245,800
|
|
Spirits
|
$ 50,924,735
|
$ 48,802,397
|
|
Wine
|
44,353,558
|
42,635,146
|
|
Beer
|
81,854,974
|
78,631,518
|
|
Ready-to-Drink
|
33,361,222
|
30,877,160
|
|
Cannabis
|
28,833,995
|
26,628,456
|
|
Non-liquor
|
25,523
|
29,928
|
|
Total Sales by Category
|
$ 239,354,007
|
$ 227,604,605
|
|
|
|
|
Gross Profit
|
$ 117,843,994
|
$ 112,507,953
|
|
Store Operating Expenses
|
(22,222,965)
|
(21,207,635)
|
|
Gross Operating Income
|
$ 95,621,029
|
$ 91,300,318
|
|
Other Corporate Expenses & Other Earnings
|
(12,804,396)
|
(12,918,612)
|
|
Income from Operations
|
$ 82,816,633
|
$ 78,381,706
|
| Sales by Channel |
Sales |
Change |
| NSLC Stores |
$198.9 M |
$7.9 M (4.2%) |
| Licensees (bars/restaurants/pubs) |
$14.3 M |
$2.4 M (19.9%) |
| Agency Stores (independently owned) |
$19.8 M |
$1.7 M (9.1%) |
| Private Wine and Specialty Stores |
$5.7 M |
$0.2 M (-2.6%) |
| Other Wholesale |
$0.2 M |
$0.01M (-7.3%)
|
| Online |
$0.4 M |
$0.1 M (-13.3%)
|
Operating Expense Ratio
The NSLC’s operating expense ratio for the fiscal quarter, including amortization and depreciation, was 14.6% compared to 15.0% reported the prior year.
Board Expenses
The NSLC released the Board of Directors’ expenses for the quarter. These expenses amounted to $3.82 per Director, per day. An electronic version of these expenses is available at myNSLC.com.
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 visit our website at myNSLC.com.
For more information please contact:
Allison Himmelman
Manager, Internal Communications
Allison.Himmelman@myNSLC.com
O: (902) 450-7563
M: (902) 221-5246