In Q3-2024, LNF’s sales came in at $651.9M, slightly missing the estimate of $678M, and EPS came in at $0.54, which also missed slightly the estimate of $0.55. The results were not strong but they were largely in-line with expectations.
The spin-off of the real estate portfolio continues to be a key thesis for LNF. We think the new CEO – Michael Walsh, has had a track record of creating similar transactions through a REIT in the past at Canadian Tire. He is committed to unlocking shareholder value, given what he believes is the significant mismatch between the company’s assets (real estate portfolio + earning power from stores) and the company’s market cap. We think the timeline is getting close and investors need patience for the thesis to play out.