- Consolidated comparable sales up 1.6% in the second
quarter:
-
- Canadian Tire up 2.0%; Mark's up 1.3%; FGL down 0.3%
- Financial Services drove industry leading receivable growth of
10.4%, reaching a significant milestone of 2 million active credit
card accounts
- Retail gross margin rate (excluding Petroleum) maintained at Q2
2017 level
- Second quarter diluted earnings per share (EPS) was
$2.38
- Second quarter normalized diluted EPS was $2.61, down 7.2%, after adjusting for costs
associated with the launch of Triangle Rewards® and Helly Hansen
acquisition
- CTC closed acquisition of Helly Hansen on July 3, 2018
TORONTO, Aug. 9, 2018 /CNW/ - Canadian Tire Corporation,
Limited (TSX:CTC, TSX:CTC.A) today released second quarter results
for the period ended June 30,
2018.
"In the second quarter, we significantly advanced our strategic
agenda to strengthen our retail operations and financial services
business, and set a foundation for our international growth," said
Stephen Wetmore, President and CEO,
Canadian Tire Corporation. "The launch of Triangle Rewards®, our
new loyalty program, the introduction of Canada's best credit card offering, Triangle
World Elite and the completion of our international brand
acquisition, Helly Hansen, are all critical cornerstone investments
for our future. These investments along with the continued
development of our digital, owned brands and online capabilities
reflect our commitment to the long term success of CTC and are
evident in our results for the quarter."
"While our expectations for growth in the quarter were much
higher, it is a testament to the strength of our brands that we
grew our retail sales on a year over year basis, despite all of our
retail businesses being affected by one of the coldest months of
April on record," added Wetmore.
CONSOLIDATED OVERVIEW
- Consolidated retail sales increased $147.0 million, or 3.6%, in the second quarter.
Excluding Petroleum, consolidated retail sales were up 1.6% over
the same period last year.
- Consolidated revenue increased $106.7
million, or 3.2%, which includes a $79.5 million increase in Petroleum revenue
resulting from higher per litre gas prices. Excluding Petroleum,
consolidated revenue increased $27.2
million, or 0.9%, in the quarter.
- Normalized diluted EPS was $2.61
in the quarter, a decrease of $0.20
per share, or 7.2%, over the second quarter of 2017.
RETAIL OVERVIEW
- The following financial results reflect Q2 2018 performance
compared to Q2 2017.
- Retail segment revenue increased $93.7
million or 3.0%. Excluding Petroleum, retail segment revenue
increased 0.5%.
- Retail margin rate excluding Petroleum was flat with a decrease
of 3 bps.
- Normalized income before income taxes decreased $24.6 million or 13.4%.
- Canadian Tire Retail saw retail sales increase 2.3% and
comparable sales were up 2.0%.
- FGL's retail sales were down 1.9% and comparable sales
decreased 0.3%.
- Mark's retail sales grew 1.6% and comparable sales increased
1.3%.
CT REIT OVERVIEW
- As disclosed in the Q2 2018 CT
REIT earnings release on August 1,
2018, CT REIT announced four new investments in its
quarterly results at an estimated cost of $24 million.
FINANCIAL SERVICES OVERVIEW
- Normalized income before income taxes decreased 16.1% in the
second quarter to $84.9 million due
primarily to the adoption of IFRS 9 accounting.
- Net write-off rate of 5.62% was flat to last year, reflecting
the health of the portfolio and continued strong credit risk
management.
CAPITAL EXPENDITURES
- Operating capital expenditures were $101.0 million in the quarter, up from
$70.7 million in the second quarter
of 2017.
QUARTERLY DIVIDEND
- The Company has declared dividends payable to holders of Class
A Non-Voting Shares and Common Shares at a rate of $0.90 per share payable on December 1, 2018 to shareholders of record as of
October 31, 2018. The dividend is
considered an "eligible dividend" for tax purposes.
SHARE REPURCHASE
- On November 9, 2017, the Company
announced its intention to repurchase $550.0
million of its Class A Non-Voting Shares, in excess of the
amount required for anti-dilutive purposes, by the end of 2018. As
at June 30, 2018 the Company had
repurchased $379.0 million, leaving
$171.0 million that is expected to be
repurchased during the remainder of fiscal 2018.
To view a PDF version of Canadian Tire Corporation's second
quarter 2018 results please see:
http://files.newswire.ca/116/CTC_MDA_FS-Q22018.pdf
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking information that
reflects management's current expectations related to matters such
as future financial performance and operating results of the
Company. Forward-looking statements are provided for the
purposes of providing information about management's current
expectations and plans and allowing investors and others to get a
better understanding of our anticipated financial position, results
of operations and operating environment. Readers are cautioned
that such information may not be appropriate for other
purposes.
Certain statements other than statements of historical facts
included in this press release may constitute forward-looking
information, including but not limited to, statements concerning
the Company's intention to repurchase Class A Non-Voting Shares, in
excess of the amount required for anti-dilutive purposes, by the
end of 2018 under the heading "Share Repurchase".
By its very nature, forward-looking information requires us to
make assumptions and is subject to inherent risks and
uncertainties, which give rise to the possibility that the
Company's assumptions, estimates, analyses, beliefs and opinions
may not be correct and that the Company's expectations and plans
will not be achieved. Although the Company believes that the
forward-looking information in this press release is based on
information, assumptions and beliefs which are current, reasonable
and complete, this information is necessarily subject to a number
of factors, risks and uncertainties that could cause actual results
to differ materially from management's expectations and plans as
set forth in such forward-looking information.
For more information on the risks, uncertainties and assumptions
that could cause the Company's actual results to differ from
current expectations, refer to section 2.11 (Risk Factors) of our
Annual Information Form for fiscal 2017 and to sections 7.2.4
(Retail segment business risks), 7.3.2 (CT REIT segment business
risks), 7.4.3 (Financial Services segment business risks) and 12.0
(Enterprise Risk Management) and all subsections thereunder of our
Management's Discussion and Analysis for the year ended
December 30, 2017, as well as the
Company's other public filings, available at www.sedar.com and at
www.corp.canadiantire.ca.
The forward-looking statements and information contained herein
are based on certain factors and assumptions as of the date hereof
and do not take into account the effect that transactions or
non-recurring or other special items announced or occurring after
the statements are made have on the Company's business. The Company
does not undertake to update any forward-looking information,
whether written or oral, that may be made from time to time by it
or on its behalf, to reflect new information, future events or
otherwise, except as is required by applicable securities laws.
CONFERENCE CALL
Canadian Tire will conduct a
conference call to discuss information included in this news
release and related matters at 1:00 p.m.
ET on August 9, 2018. The
conference call will be available simultaneously and in its
entirety to all interested investors and the news media through a
webcast at http://corp.canadiantire.ca/EN/investors, and will be
available through replay at this website for 12 months.
ABOUT CANADIAN TIRE CORPORATION
Canadian Tire
Corporation, Limited, (TSX: CTC.A) (TSX: CTC) or "CTC", is a family
of businesses that includes a Retail segment, a Financial Services
division and CT REIT. Our retail business is led by Canadian Tire,
which was founded in 1922 and provides Canadians with products for
life in Canada across its Living,
Playing, Fixing, Automotive and Seasonal & Gardening divisions.
PartSource and Gas+ are key parts of the Canadian Tire network. The
Retail segment also includes Mark's, a leading source for casual
and industrial wear; Pro Hockey Life, the world's largest hockey
centric retailer; and FGL (Sport Chek, Hockey Experts, Sports
Experts, National Sports, Intersport and Atmosphere), which offers
the best active wear brands. The approximately 1,700 retail and
gasoline outlets are supported and strengthened by our Financial
Services division and the tens of thousands of people employed
across Canada and around the world
by the Company and its local dealers, franchisees and petroleum
retailers. In addition, Canadian Tire Corporation owns and operates
Helly Hansen, a leading global brand in sportswear and workwear
based in Oslo, Norway. For more
information, visit Corp.CanadianTire.ca.
FOR MORE INFORMATION
Media:
Andrea Van Vugt, 416-480-8514,
Andrea.vanvugt@cantire.com
Investors: Lisa Greatrix,
416-480-8725, Lisa.greatrix@cantire.com
SOURCE CANADIAN TIRE CORPORATION, LIMITED