The North West Company Inc. Announces Second Quarter Earnings and an Increase in the Quarterly Dividend

Winnipeg, Manitoba, September 8, 2025 (TSX: NWC): The North West Company Inc. (the “Company” or “North West”) today reported its unaudited financial results for the second quarter ended July 31, 2025. It also announced that the Board of Directors has declared a quarterly dividend of $0.41, an increase of $0.01 or 2.5% per share, to shareholders of record on September 29, 2025, to be paid on October 15, 2025.

“Our results this quarter reflect the significant headwinds from community evacuations due to widespread wildfires across northern Canada, a decrease in Jordan’s Principle funding and ongoing pressures from a softer economy, particularly in our Alaska markets,” said Dan McConnell, President & CEO. “Our Next 100 work, including the continued refinement of our merchandise assortment and focus on labour efficiency and expense management helped mitigate these headwinds. We remain confident in the strength of our business and the resiliency of our product and service offering within this uncertain economic environment and we are committed to executing our Next 100 strategy to drive sustainable value for our customers and shareholders.”

Financial Highlights

Sales Second quarter consolidated sales increased 0.1% to $647.0 million compared to $646.5 million last year due to an increase in Canadian sales, new stores and the impact of foreign exchange on the translation of International Operations sales. Consolidated sales excluding the foreign exchange impact were flat to last year with food sales decreasing 0.8% and general merchandise and other sales increasing 2.8% compared to last year driven by higher third-party airline revenue and pharmacy sales in Canada. These factors were largely offset by lower same store sales which decreased 1.1%1 compared to a 4.3% sales gain in the second quarter last year due to a 1.8% decrease in same store sales in Canadian Operations and a 0.1%1 increase in same store sales in International Operations. Same store sales in Canadian Operations were negatively impacted by wildfire-related community evacuations in northern Canada and the impact of a decrease in funding to individuals from Jordan’s Principle and Inuit Child First programs. Excluding the stores impacted by wildfire-related community evacuations, adjusted same store sales1 increased 0.6% compared to last year.

Gross Profit Gross profit increased 0.1% to $219.9 million compared to $219.8 million last year due to sales gains as the gross profit rate was flat to last year at 34.0%. The positive impact on gross profit rate from our Next 100 work, including more effective data-driven promotions, was offset by changes in sales blend and higher markdowns and inventory shrink.

Selling, Operating and Administrative Expenses Selling, operating and administrative expenses (“Expenses”) decreased $0.1 million or 0.1% compared to last year and were down 3 basis points as a percentage to sales. The decrease in Expenses is largely due to a $3.9 million decrease in share-based compensation costs primarily related to changes in the Company’s share price in the quarter compared to last year and a decrease in vessel repairs incurred through our investment in Transport Nanuk Inc. (“TNI”) compared to last year. These factors were partially offset by an investment in staff resources and an increase in technology costs to support the Next 100 operational excellence work, an increase in depreciation and new stores. The impact of $1.7 million in one-time costs for professional fees related to the execution of the Next 100 strategy were offset by store labour productivity gains, other cost savings initiatives and more effective data-driven promotional activity, including a reduction in print media. Excluding the impact of share-based compensation and Next 100-related one-time costs, Expenses increased $2.2 million or 1.4% compared to last year and were up 32 basis points as a percentage to sales.

1 Excluding the impact of foreign exchange

2 See Non-GAAP Measures Section of the news release

Earnings From Operations Earnings from operations (“EBIT”) increased 0.5% to $55.2 million compared to $54.9 million last year, and earnings before interest, income taxes, depreciation and amortization (“EBITDA2”) increased 2.1% to $85.2 million compared to $83.4 million last year due to the sales, gross profit and Expense factors previously noted. Adjusted EBITDA2, which excludes the impact of share-based compensation and Next 100-related one-time costs, decreased $0.5 million or 0.6% to $87.9 million compared to $88.4 million last year and as a percentage to sales was 13.6% compared to 13.7% last year.

Interest Expense Interest expense decreased 0.5% to $4.3 million due to lower interest rates and lower average debt.

Income Tax Expense Income tax expense decreased to $13.2 million compared to $13.6 million last year and the effective tax rate decreased to 26.0% compared to 27.0% last year. The decrease in the effective tax rate is largely due to the impact of The Global Minimum Tax (“GMTA”) – Pillar Two legislation that was enacted in Canada on June 20, 2024 but was effective as of the beginning of the Company’s 2024 fiscal year which resulted in a year-to-date adjustment recorded in the second quarter last year.

Net Earnings Net earnings increased 1.9% to $37.6 million compared to net earnings of $36.9 million last year. Net earnings attributable to shareholders were $36.1 million and diluted earnings per share were $0.74 per share compared to $0.73 per share last year. Adjusted net earnings2, which excludes the after-tax impact of share-based compensation and Next 100-related one-time costs, decreased $1.0 million or 2.5% to $39.6 million due to the sales, gross profit, Expense, interest and income tax expense factors previously noted, including the impact of wildfire-related community evacuations in northern Canada.

Non-GAAP Financial Measures

The Company uses the following non-GAAP financial measures: earnings before interest, income taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA and adjusted net earnings. The Company believes these non-GAAP financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company for the reasons outlined below.

Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) is not a recognized measure under IFRS. Management believes that in addition to net earnings, EBITDA is a useful supplemental measure as it provides investors with an indication of the Company’s operational performance before allocating the cost of interest, income taxes and capital investments. Investors should be cautioned however, that EBITDA should not be construed as an alternative to net earnings determined in accordance with IFRS as an indicator of the Company’s performance. The Company’s method of calculating EBITDA may differ from other companies and may not be comparable to measures used by other companies.

Adjusted EBITDA and Adjusted Net Earnings are not recognized measures under IFRS. Management uses these non-GAAP financial measures to exclude the impact of certain income and expenses that must be recognized under IFRS. The excluded amounts are either subject to volatility in the Company’s share price or may not necessarily be reflective of the Company’s underlying operating performance. These factors can make comparisons of the Company’s financial performance between periods more difficult. The Company may exclude additional items if it believes that doing so will result in a more effective analysis and explanation of the underlying financial performance. The exclusion of these items does not imply that they are non-recurring.

These measures do not have a standardized meaning prescribed by GAAP and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to the other financial measures determined in accordance with IFRS.

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