Halifax, February 15, 2022 – The NSLC released its third quarter financial results today (October 4, 2021 – January 2, 2022), reporting a 1.3% reduction in earnings to $74.0 million. Sales increased 2.4% to $215.0 million due to an increase in both beverage alcohol and cannabis sales.
“I’m extremely proud of our people who continue to deliver on exceptional and responsible service while supporting our communities in this ongoing pandemic,” said Greg Hughes, President & CEO.“It’s a tough time for everyone and I have great respect for our people who have shown amazing resilience as they consistently rise to the challenge.”
There was a 1.1% increase in beverage alcohol sales in the quarter to $189.8 million and 13.7% increase in cannabis sales to $25.2 million. Earnings were down due to increased sales of cannabis and local products, which both carry lower mark-ups, increased freight costs, and payroll increases.
We opened three new cannabis stores this quarter for a total of 36 stores – triple the number at legalization – as we deliver on our mandate to ensure a safe, secure supply of cannabis across the province. The 3.8% reduction in the average value of those cannabis transactions reflects the ongoing reduction in cannabis prices as the industry continues to mature.
Local products continue to be a favourite. There was growth in every category with buying local now imbedded in the behaviour of Nova Scotia customers. Spirits led the growth in sales of local beverage alcohol products at 15.7% while local cannabis sales grew 46.9% to $6.6 million. We now carry products from 13 Nova Scotia suppliers, including three micro-cultivators, with local cannabis accounting for 26.0% of all cannabis sales. Sales to bars, pubs and restaurants continued to recover with a 47.3% increase in sales to $9.2 million. “It’s been a very difficult time for our licensee partners, and we’re pleased to see they’re continuing to experience the return of their valued customers,” Hughes said. “We’re two years into this pandemic and it’s amazing to see how we’re navigating through this together, supporting each other in the workplace and in our communities under challenging circumstances,” Hughes said.These efforts included funding community grants to our partner the Mental Health Foundation of Nova Scotia, meals for our partner Feed Nova Scotia and awareness and education through MADD Canada. Through our partnership with the United Way, our Head Office team shared the holiday cheer by signing over 400 holiday gift cards for seniors.
Q3 Business Highlights
- Our diligent front-line employees asked customers who appeared to be under the age of 30 for valid photo ID 648,205 times and refused service 5,486 times.
- Through our partnership with United Way, our Head Office team came together to write more than 400 holiday cards for seniors, which were delivered through Spencer House and Veith House.
- Through our holiday Share the Cheer Campaign together with our employees, partners, and customers we will be investing $350,000 back into our communities through our three partners:
- Mental Health Foundation of Nova Scotia – Through our Community Grants program as many as 46 non-profits/programs will receive funding across the province
- Feed Nova Scotia – Funds will enable 186,531 meals to be distributed across the province to 140 partner organizations
- MADD Canada – Red Ribbon Project funds are used for victim and survivor services in Nova Scotia, school programming and public awareness and education.
- Opened three new cannabis stores:
- Dominion in Cape Breton, and Porter’s Lake and Eastern Passage in Halifax County
- Reduced the average price per gram of cannabis 16% compared to the previous fiscal year.
Financial Highlights (compared to the same period last year):
Net income (earnings) totaled $74.0 million; down $1.0 million or 1.3%.
- Total sales were $215.0 million; an increase of $5.1 million or 2.4%, due to increases in both beverage alcohol and cannabis sales.
- Cannabis sales were $25.2 million, an increase of 13.7%.
- Beverage alcohol sales were $189.8 million, an increase of 1.1%.
- Retail customer transactions (purchases) for beverage alcohol were down 1.6% and the average dollar value of each transaction increased by 1.6% to $40.21.
- The total volume of beverage alcohol sold was down 0.2%.
- Retail customer transactions for cannabis were up 18.2% and the average dollar value of each transaction decreased by 3.8% to $39.90 as the average price per gram went down 16% with the maturing of the industry.
Local Product Sales Highlights
Beverage Alcohol
- Nova Scotia spirit products led the growth in local beverage alcohol products sales with a 15.7% increase in sales to $4.4 million.
- Nova Scotia wine sales saw strong growth with a 13.9% increase to $5.0 million.
- Nova Scotia craft beer saw good growth of 11.3% to $6.7 million.
- Nova Scotia Ready to Drink sales saw growth of 3.0% to $6.4 million.
- Local coolers grew 2.4% to $4.7 million.
- Local ciders grew 4.4% to $1.7 million.
Cannabis
- Nova Scotia cannabis sales led the growth in local products with 46.9% growth in sales to $6.6 million.
- Nova Scotia cannabis accounts for 26.0% of all cannabis sales.
| Q3 |
2021/2022 |
2020/2021 |
| Sales Volume (Hectolitres) |
208,346
|
208,684 |
| Spirits |
$ 57,577,770 |
$ 56,192,064 |
| Wine |
45,624,406 |
45,767,895 |
| Beer |
66,592,598 |
67,582,592 |
| Ready-To-Drink |
19,981,497 |
18,214,538 |
| Cannabis |
25,229,592 |
22,186,591 |
| Non-Liquor |
34,056 |
32,357 |
| Total Sales by Category |
$ 215,039,920 |
$ 209,976,037 |
|
|
|
| Gross Profit |
$ 108,134,679 |
$ 108,028,580 |
| Store Operating Expenses |
(21,845,220) |
(20,047,233) |
| Gross Operating income |
$ 86,289,459 |
$ 87,981,346 |
| Other Corporate Expenses & Other earnings |
(12,337,026) |
(13,066,722) |
| Income from Operations |
$ 73,952,433 |
$ 74,914,624 |
| Sales by Channel |
Sales |
Change |
| NSLC Stores |
$186.3 M |
$3.4M (1.9%) |
| Licensees (bars/restaurants/pubs) |
$9.2 M |
$3.0M (47.3%) |
| Agency Stores (independently owned) |
$15.4 M |
$0.02M (0.1%) |
| Private Wine and Specialty Stores |
$3.6 M |
$0.9 M (-20.9%) |
| Other Wholesale |
$0.2 M |
$0.1 M (-42.1%) |
| Online |
$0.5 M |
$0.3 M (-35.3%) |
Operating Expense Ratio
The NSLC’s operating expense ratio for the fiscal quarter, including amortization and depreciation, was 15.9%, up marginally from 15.8% the prior year.
Board Expenses
The NSLC released the Board of Directors’ expenses for the fiscal year. These expenses amounted to $6.53 per Director, per day. An electronic version of these expenses is available at 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 visit our website at myNSLC.com.
For more information please contact:
Beverley Ware
Communications and Media Relations Manager
beverley.ware@myNSLC.com
O: (902) 450-5920
M: (902) 456-5040