Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research October Market Mover: The North West Company Inc.
The best performer was North West company (NWC) whose stock was up 12.16% on the month, down 3.82% YTD and up 6.81% over the past year. The stock hit a near term low on September 7th , 2023 of $29.81 from which it rose precipitously to $34.65 on September 13th about where it closed for the period.
It is a leading retailer to rural and developing small population communities in northern Canada, rural Alaska, the South Pacific and the Caribbean. It started in 1987 when the Company's predecessor purchased 178 stores comprising the Northern Stores Division of the Hudson’s Bay Company. Its stores offer a broad range of products and services with an emphasis on food and a compelling value offer of being the best local shopping choice for everyday household and lifestyle needs.
The announcement on September 12t ,2023 of 2nd quarter results was the apparent trigger to this stock price jump. Sales at $618 were up 6.8% over the prior year comparable period; Gross profit was up 11.1%; adjusted EBITDA at $83.3 million was up 14.7%; net earnings at $38 million up 17.5%; diluted eps were $0.76 compared to $0.64 in the prior period.
Near term operations will continue to be influenced by inflationary cost pressures and wild fires. Over the longer term, Management believes the outlook is favourable due to impact of Government transfer payments and higher infrastructure spending in indigenous communities.