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Leon's Furniture Ltd. reported a near 20-per-cent drop in its second-quarter profit compared with a year ago as it marketing costs rose.

The retailer said Monday it earned $9-million or 13 cents a share for the quarter ended June 30, down from $11.2-million or 16 cents a year ago.

System-wide sales totalled $207.7-million, including $45.6-million in franchise sales, down from $209.3-million a year ago, when franchise sales totalled $45.5-million.

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Same-store corporate sales fell 5.8 per cent compared with the second quarter of 2011.

Leon's said marketing expenses were up $2.4-million compared with a year ago, while its occupancy costs were up $1.2-million owing to four new stores added in the fall of last year.

In its outlook, the company said the slowdown in the economy continues to affect its results and it did not see any immediate signs of improvement.

"As such, we anticipate that consumer discretionary spending will remain soft throughout 2012," the company said in a statement.

"To help counter this, we will continue our strong marketing and merchandising campaign for the balance of 2012. The recent opening of four new stores in the latter part of 2011 should also aid our sales in 2012."

Leon's has 44 corporate and 32 franchise stores across Canada, except British Columbia.

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