Leon’s Furniture reported strong third-quarter earnings and margin expansion, driven by solid furniture sales and continued cost discipline. The retailer says it is benefiting from more qualified in-store customers, strong brand loyalty and online traffic growth despite softer retail spending.
BNN Bloomberg spoke with Michael Walsh, president and CEO of LFL Group, about the company’s strategy to navigate consumer caution, diversify sourcing, and adapt marketing as Canada Post disruptions continue to affect flyer delivery.
Key Takeaways
- Leon’s reported strong earnings and margin growth in the third quarter despite a soft retail environment.
- Furniture sales remained the standout performer, supported by a streamlined product assortment and higher consumer engagement.
- The company continues to see more qualified in-store shoppers as most customers start their buying journey online.
- Canada Post service disruptions have affected marketing, prompting greater focus on SEO, SEM and AI-driven strategies.
- Leon’s says it remains nimble, with diversified sourcing and limited tariff exposure supporting long-term resilience.
Read the full transcript below:
ROGER: Leon’s Furniture is out with its third-quarter results. The company is showing a strong year-over-year improvement in adjusted earnings despite a challenging retail environment. Here to tell us more is president and CEO of LFL Group, Michael Walsh. Michael, thank you very much for joining us.
MICHAEL: Good morning, Roger.
ROGER: You had a good quarter. What worked for you this time? What did you like about it?
MICHAEL: Well, I think we started the year off by really looking at our assortment, especially in furniture, and reducing the size of that assortment — then going long and deep on the furniture. I think that’s helped us win.
I also think there’s been a bit of a phenomenon with the consumer. We’ve seen a lot of eyeballs going to our website, but not as much of an increase in traffic going into stores. That tells me it’s more qualified customers coming into the store, which allows us to spend more time with them and sell after-sales service.
The customer today is very price-conscious and really geared toward value. We believe that, given our strength in final-mile delivery, we’re winning market share.
ROGER: Do you want to get more people going to the website? Is that key for you in the future?
MICHAEL: It’s always important to drive people to the website. Customer journeys start online — about 75 per cent of consumers shopping for furniture begin there — but they do end up going into stores. That’s why bricks and mortar are still really powerful. People still want to sit on a sofa, lie on a mattress. They may go home and make the purchase online, or they may buy in the store.
ROGER: And how are you helping them? Is AI a factor? Are you setting up online tools where people can see how furniture would look in their homes?
MICHAEL: Yes, we’re doing a lot of work with AI. We’re looking at it closely. Retailers are finding there’s a lot of opportunity in AI, but there’s really nothing off-the-shelf right now. We’re continuing to work with a number of organizations to find ways we can take advantage of it.
ROGER: And with stores — you said you’re getting people in, which is nice. Do you see any expansion, or is it the status quo right now?
MICHAEL: We’re always looking for new store openings. Leon’s is focused on the West Coast, Brick on the East Coast. But we’re opportunistic, because when we open a store, we want to make money. We’re not going to chase sales just by opening more stores.
ROGER: Bringing it back to the quarter, how did it unfold? There’s been concern about spending pressure. Was it steady through the three months or mixed?
MICHAEL: It was steady through the three months. It started to tail off at the end of September, when the postal strike started again. You can imagine for high-low retailers that don’t have flyers in the market through the postal service, it makes things more challenging. But it’s no different than last year — the strike happened in mid-November, and we didn’t have flyers in play with Canada Post during Black Friday and Boxing Day.
ROGER: With concern about another possible strike, are you looking at alternatives?
MICHAEL: Absolutely. We’re looking at a number of different things, whether it’s dialing up our online presence through SEO or SEM, or looking at how AI perceives our company. There are a number of factors at play. We’ve been around for 100 years, so we’ve been through every market condition imaginable. We’re very nimble and can change things up quickly.
ROGER: And of course, the big question for a lot of people — tariffs. What kind of impact are they having on Leon’s?
MICHAEL: We’ve had very little impact from tariffs — in fact, it’s been negligible. Anything we were bringing in from the U.S., we’ve paused for now as we figure out what the lay of the land will be.
ROGER: And that minimal impact — is that because a lot of your furniture comes from outside the U.S. or is made in Canada?
MICHAEL: We have furniture from all over the world — Asia, Canada, a little from elsewhere. What we learned during the pandemic was that you really need to diversify your assortment.
ROGER: And for the items you paused from the U.S., are you finding Canadian alternatives?
MICHAEL: Absolutely. In fact, most of the things we stopped taking from the U.S. are now being made in Canada.
ROGER: Okay, Michael, thank you very much for joining us. We appreciate it.
MICHAEL: Thanks for having me, Roger. Have a great day.
ROGER: Michael Walsh is the president and CEO of LFL Group.
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This BNN Bloomberg summary and transcript of the Nov. 11, 2025 interview with Michael Walsh are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
