Lumber Depot Reports YoY Growth in Net Profit on the Back of Higher Revenue

• Owing to an increase in revenue, Lumber Depot Ltd reported a 140.0% year-over-year increase in net profit to $71.79Mn (EPS: $0.10) for the three months ended July 31, 2021. 
• Revenue grew by 16.3% outweighing the rise in direct (7.5%) and indirect costs (5.6%). This was largely due to successful efforts to negotiate adequate stock levels and reasonable cost prices for all key hardware items while maintaining fair selling prices to the market.  The company’s efforts to maintain commercially reasonable opening hours and staffing levels throughout the COVID-19 pandemic have also helped to support sales. 
• Curfews, travel restrictions, and new workplace rules have presented risks to its supply chain, have strained consumer and business confidence, and have resulted in increased volatility in exchange rates.  Notwithstanding, the company can remain resilient and management has indicated that it has the balance sheet to allow it to consider a range of strategic investment initiatives.  
• The business has over $390Mn of equity and over $268Mn of cash, cash equivalents, and investments.  It has decided to prioritize projects that allow it to strengthen its overall long‐term market position and drive the competitiveness of the core retail business. 
• Lumber Depot’s stock price has grown 101.4% since the start of the year and closed Thursday’s trading session at $3.11 per share. At this price, the stock trades at a P/E ratio of 11.5x earnings which is below the junior market distribution and manufacturing sector average of 21.6x.

(Source: Lumber Depot Financials)