- Aggressive plan to compete in rapidly changing retail
environment
- Innovating and investing in digital, technology and
analytics
- Financial aspirations of annualized sales growth of 3%+ at
Canadian Tire, 5%+ at Mark's and 9%+ at FGL Sports
- Intends to return capital to shareholders through buy-back of
an additional $400 million of the
Company's Class A Non-Voting Shares through end of 2015
- Ongoing evaluation of acquisitions to expand category authority
in heritage businesses
TORONTO, Oct. 9, 2014 /CNW/ - Canadian Tire Corporation,
Limited (TSX:CTC, TSX:CTC.a) today outlined its three-year vision
to keep the Company 'on offence' in a rapidly changing retail
environment.
Growth from Core Businesses
"We can unlock tremendous growth in our existing businesses,"
said Michael Medline, President and incoming CEO of Canadian Tire
Corporation. "We have an innovative and aggressive management
team that I would put up against the best in the industry. We
have exceptional entrepreneurs in our Associate Dealers at Canadian
Tire. Each of our businesses has a clear three-year vision
for growth – and we're already seeing the early results of changes
that were initiated in recent years."
Canadian Tire and Mark's are executing a 'generational shift' in
the target customer – continuing to be relevant for today's core
customers, while becoming more relevant to young families with
kids. This will involve an evolution in product assortments,
marketing, store layouts and investments in digital and online
offerings.
Sport Chek is one of the fastest growing retailers in
North America and will continue to
drive growth through significant brand investments and over two
million square feet of new, premium retail space between 2012 and
2017. Investments in digital innovations and technology at
Sport Chek are expected to attract new customers and increase the
frequency and size of purchases – and learnings from the digital
journey will accrue to the rest of the Company.
Canadian Tire Financial Services will continue to provide a
strong value proposition for Canadian Tire customers, including
in-store instant credit and increased loyalty rewards through the
new Canadian Tire loyalty program for Options MasterCard
holders.
Canadian Tire's greatest asset is its strong, trusted brand with
customers. The Company will continue to invest in
communities, with a focus on sports through its 'We All Play for
Canada' platform and national
partnership with the Canadian Olympic Committee. This will
include getting kids active for an hour a day in schools through
the 'Active at School' program, and helping families in need get
their kids into organized sports programs through the Company's
charity, 'Jumpstart'.
Financial Aspirations
The Company announced financial aspirations for its businesses,
including annualized sales growth of 3%+ at Canadian Tire, 5%+ at
Mark's and 9%+ at FGL Sports. In addition, the Company also
announced targets for return on invested capital of 9% by the end
of 2017, return on receivables growth in the financial services
business of 6%+ and average diluted EPS growth of 8-10% over the
three-year period.
Balanced Approach to Capital Allocation
"We will be judged on our results and how wisely we're investing
shareholders' money," said Medline. "Our core businesses will
have the capital they need to grow and compete – including
increased investments in digital and technology. We are
continually evaluating acquisition opportunities, but we have
proven that we're slow to the trigger and are vigilant in our
selection criteria. Any acquisition has to make sense
strategically and financially. It has to be the right cultural and
business fit and it has to generate a strong return."
"Meanwhile, we will continue to return capital to our
shareholders – through dividend payments and buying back our shares
when we believe that we are undervalued in the market and that it
is the best use of our cash," added Medline.
The Company expects to make an average annual capital investment
of $575 million from 2015-2017,
including significant new investments in digital technology and an
expansion and upgrade of the Company's store network.
These investments do not include expenditures related to
distribution centre capacity and any properties acquired by CT REIT
from vendors other than the Company.
The Company announced that it intends to buy back an additional
$400 million of the Company's Class A
Non-Voting Shares through to the end of 2015, subject to regulatory
approval. It also confirmed that it will maintain its dividend
policy, paying out 25-30% of the prior year's normalized earnings.
The Company has a history of increasing its dividend, with nine
increases over the last ten years to reach the current payout of
$2.00 per share.
As the Company continues to evaluate possible acquisitions to
grow core categories, it will look for companies with a strong
financial outlook, a brand with great potential, a profitable base
and runway for growth. Also, any acquisition must have a
distinctive long-term value proposition that can be strengthened
through existing CTC expertise.
INVESTOR CONFERENCE WEBCAST: October
9, 2014, at 8:30 a.m.
- The live video webcast will be available at
www.ctc2014investorday.com
- The webcast and presentation materials will be accessible on
the Investor Relations website at
http://corp.canadiantire.ca/EN/Investors and will be archived for
twelve months.
- The audio portion is also accessible by dial-in: 1-866-305-1460
within Canada and U.S. or
- 1 416-620-1296 outside of Canada and U.S.
- Reservation Number: 8659316
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
categories. 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, and FGL Sports (Sport Chek, Hockey
Experts, Sports Experts, National Sports, Intersport, Pro Hockey
Life and Atmosphere), which offers the best active wear brands. The
nearly 1,700 retail and gasoline outlets are supported and
strengthened by our Financial Services division and the tens of
thousands of people employed across the Company. For more
information, visit Corp.CanadianTire.ca.
FOR MORE INFORMATION
FORWARD-LOOKING STATEMENTS
This document 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.
All statements other than statements of historical facts
included in this document may constitute forward-looking
information, including but not limited to, statements regarding the
Company's financial aspirations for sales growth, return on
invested capital, return on receivables growth and EPS growth over
the next three years under the heading "Financial Aspirations",
statements regarding the Company's expected capital investments
from 2015-2017, its intention to acquire its Class A Non-Voting
Shares through to the end of 2015, its dividend policy and its
ongoing evaluation of possible acquisitions under the heading
"Balanced Approach to Capital Allocation" and other statements
concerning management's expectations relating to possible or
assumed future prospects and results, our strategic goals and
priorities, our actions and the results of those actions and the
economic and business outlook for us. Often but not always,
forward-looking information can be identified by the use of
forward-looking terminology such as "may", "will", "expect",
"intend", "believe", "estimate", "plan", "can", "could", "should",
"would", "outlook", "forecast", "anticipate", "foresee",
"continue", "ongoing" or the negative of these terms or variations
of them or similar terminology. Forward-looking information is
based on the reasonable assumptions, estimates, analyses, beliefs
and opinions of management made in light of its experience and
perception of trends, current conditions and expected developments,
as well as other factors that management believes to be relevant
and reasonable at the date that such information is provided.
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. Examples of management's beliefs, which may
prove to be incorrect include, but are not limited to, beliefs
about the effectiveness of certain performance measures, beliefs
about current and future competitive conditions and the Company's
position in the competitive environment, beliefs about the
Company's core capabilities and beliefs regarding the availability
of sufficient liquidity to meet the Company's contractual
obligations. Although the Company believes that the forward-looking
information in this document is based on information, assumptions
and beliefs which are current, reasonable and complete, this
information is necessarily subject to a number of factors that
could cause actual results to differ materially from management's
expectations and plans as set forth in such forward-looking
information for a variety of reasons. Some of the factors - many of
which are beyond our control and the effects of which can be
difficult to predict - include (a) credit, market, currency,
operational, liquidity and funding risks, including changes in
economic conditions, interest rates or tax rates; (b) the ability
of CTC to attract and retain high quality employees for all of its
businesses, Dealers, Canadian Tire Petroleum agents and Mark's Work
Wearhouse and FGL Sports franchisees, as well as our financial
arrangements with such parties; (c) the growth of certain business
categories and market segments and the willingness of customers to
shop at our stores or acquire our financial products and services;
(d) our margins and sales and those of our competitors; (e) the
changing consumer preferences toward e-commerce, online retailing
and the introduction of new technologies; (f) risks and
uncertainties relating to information management, technology,
property management and development, supply chain, product safety,
changes in law, regulation, competition, seasonality, weather
patterns, commodity price and business disruption, our
relationships with suppliers, manufacturers, partners and other
third parties, changes to existing accounting pronouncements, the
risk of damage to the reputation of brands promoted by CTC and the
cost of store network expansion and retrofits; (g) our capital
structure, funding strategy, cost management programs and share
price; and (h) the ability to obtain all necessary regulatory
approvals. We caution that the foregoing list of important factors
and assumptions is not exhaustive and other factors could also
adversely affect our results. Investors and other readers are urged
to consider the foregoing risks, uncertainties, factors and
assumptions carefully in evaluating the forward-looking information
and are cautioned not to place undue reliance on 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, please refer to the "Risk Factors" section of
our Annual Information Form for fiscal 2013 and to sections 7.4.1.3
(Retail segment business risks), 7.4.2.3 (CT REIT segment business
risks), 7.4.3.3 (Financial Services segment business risks) and
11.0 (Enterprise Risk Management) and all subsections thereunder of
our 2013 Management's Discussion and Analysis, as well as the
Company's other public filings, available at www.sedar.com and at
www.corp.canadiantire.ca.
Statements that include forward-looking information 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. For example, they do not
include the effect of any dispositions, acquisitions, asset
write-downs or other charges announced or occurring after such
statements are made.
The forward-looking statements and information contained herein
are based on certain factors and assumptions as of the date hereof.
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.
SOURCE CANADIAN TIRE CORPORATION, LIMITED