Halifax, February 16, 2021 – The NSLC released its third quarter financial results today (September 28 -December 27, 2020), reporting a 14.3% increase in earnings for a total of $74.9 million. Total sales for the quarter were $210.0 million, with beverage alcohol sales of $187.8 million and cannabis sales of $22.2 million.
“Customers’ purchasing patterns continue to change with the pandemic”, said Greg Hughes, NSLC President & CEO. There was an 11.7% increase in beverage alcohol sales and a 19.7% increase in the average basket size when compared to the same time last year.
During the quarter, sales to Private Wine and Specialty Stores were up 29.0% and sales to Agency stores were up 28.6%. While sales to licensees (bars, restaurants and pubs) were higher than the previous two quarters they remained down compared to the same time last year ($6.2M or 49.0%), especially in the Halifax area due to COVID-19 restrictions.
Cannabis sales increased by 27.5% during the quarter. The NSLC added six new cannabis stores to the network and the cannabis market is maturing, which has resulted in a 23% decrease in the average price per gram, to $7.58, and a stable supply of the larger package sizes customers are seeking.
“This growth in cannabis sales indicates we are making progress in fulfilling our mandate to impact the illicit market with a safe, secure supply of cannabis,” said Hughes.
This quarter was highlighted by the launch of Cheers to Good Choices, a new social responsibility platform that features commercials with NSLC employees both on camera and behind the scenes. The campaign is about educating customers on what responsible consumption is and what it means for them. “I’m very proud of our employees for participating in this initiative and helping to bring this important message to life,” Hughes said. “It provides relevant and relatable tips to help Nova Scotians plan ahead, consume responsibly and be responsible hosts.”
Q3 Business Highlights
- Thanks to the outstanding efforts of our team members and our generous customers, together we donated $230,000 to our three community partners – the IWK Foundation, Make-A-Wish Canada, and Feed Nova Scotia.
- Our diligent front-line employees asked customers who appeared to be under the age of 30 for valid photo ID 614,990 times and refused service 5,614 times.
- We launched a Keep It Social (KIS) video with the support of Atlantic University Sport and student athletes. KIS is a student-led partnership promoting responsible beverage alcohol and cannabis consumption, personal choice, and a culture of moderation.
- Invested in eight stores in the NSLC retail network:
- Opened six new modular cannabis stores: Baddeck, Glace Bay, Port Hawkesbury, Tacoma, Tantallon and Tatamagouche.
- Renovated our Tantallon store to be a Signature store that also offers cannabis.
- Renovated our stores in Port Hood and Sheet Harbour and the exterior of our store in New Waterford.
- Reduced the average price per gram of cannabis 23% compared to the same period last year.
Financial Highlights (compared to the same period last year):
- Net income (earnings) totaled $74.9 million; up $9.4 million or 14.3%.
- Total sales were $210.0 million; an increase of $24.4 million or 13.2%, due to increased beverage alcohol and cannabis sales.
- Cannabis sales were $22.2 million, an increase of 27.5%.
- Beverage alcohol sales were $187.8 million, an increase of 11.7%.
- Retail customer transactions (purchases) for beverage alcohol were down 3.6%, however the average dollar value of each transaction grew by 19.7% to $39.57.
- The total volume of beverage alcohol sold was up 8.0%.
- Retail customer transactions for cannabis were up 2.6% and the average dollar value of each transaction grew by 24.2% to $41.48.
Local Product Sales Highlights
Beverage Alcohol
- Nova Scotia ready to drink products continued to lead the growth in local product sales with a 74.2% increase in sales to $6.2 million. This strong growth was driven by low calorie vodka coolers and sweeter coolers recently introduced to the market.
- Nova Scotia craft beer saw strong growth of 20.8% to $6.0 million. We now list products from 30 local breweries, up from seven breweries just five years ago.
- Nova Scotia spirit sales experienced very strong growth of 32.3% to $3.8 million.
- Nova Scotia wine sales saw strong growth of 22.7% to $4.4 million.
Cannabis
- Nova Scotia cannabis sales continue to be extremely strong with 31.5% growth in sales to $4.5 million. Nova Scotia cannabis accounts for 20.1% of all cannabis sales.
| Q3 |
2020/2021 |
2019/2020 |
| Sales Volume (Hectolitres) |
208,834 |
193,300 |
| Spirits |
$56,192,064 |
$49,752,185 |
| Wine |
45,767,895 |
441,986,611 |
| Beer |
67,582,592 |
64,454,351 |
| Ready-To-Drink |
18,215,442 |
11,904,212 |
| Cannabis |
22,186,591 |
17,405,927 |
| Non-Liquor |
31,452 |
36,314 |
| Total Sales by Category |
$209,976,037 |
$185,539,600 |
|
|
|
| Gross Profit |
$108,028,580 |
$96,596,161 |
| Store Operating Expenses |
(20,047,233) |
(18,170,798) |
| Gross Operating income |
$87,981,346 |
$78,425,362 |
| Other Corporate Expenses & Other earnings |
(13,066,722) |
12,885,095) |
| Income from Operations |
$74,914,624 |
$65,540,267 |
| Sales by Channel |
Sales |
Change |
| NSLC Stores |
$182.8M |
$25.4M (16.1%) |
| Licensees (bars/restaurants/pubs) |
$6.2M |
$6.0M (-49.0%) |
| Agency Stores (independently owned) |
$15.4M |
$3.4M (28.6%) |
| Private Wine and Specialty Stores |
$4.5M |
$1.0M (29.0%) |
| Other Wholesale |
$0.2M |
$0.1M (99.0%) |
| Online |
$0.8M |
$0.5M (155.6%) |
Operating Expense Ratio
The NSLC’s operating expense ratio for the fiscal quarter, including amortization and depreciation, was 15.8% compared to 16.7% reported the prior year.
Board Expenses
The NSLC released the Board of Directors’ expenses for the fiscal year. These expenses amounted to $1.49 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 Advisor
beverley.ware@myNSLC.com
O: (902) 450-5920
M: (902) 456-5040