- Same store sales up 3.2% at Canadian Tire, 8.5% at FGL Sports
and 6.8% at Mark's
- Diluted EPS up 21.2% or 16.5% after normalizing for one-time
costs related to the formation of CT REIT in 2013
- Annual dividend increased 5% from $2.00 to $2.10 per
share
TORONTO,
Nov. 6, 2014 /CNW/ - Canadian
Tire Corporation, Limited (TSX:CTC, TSX:CTC.a) today released third
quarter results that demonstrate strong performance and growth in
all of the Company's business units when compared to the third
quarter of 2013.
"The strong performance this quarter is very
rewarding given that it was achieved against a strong quarter last
year and reflects the successful culmination of our recent efforts
to strengthen our brand and improve the in-store experience across
our retail businesses," said Stephen
Wetmore, CEO, Canadian Tire Corporation. "Financial Services
also delivered another excellent quarter of strong receivables
growth and continued to execute well on integration efforts with
the retail businesses."
CONSOLIDATED OVERVIEW
- Third quarter consolidated retail sales increased 4.4% over the
same period last year or $142.2
million to $3.4 billion.
- Consolidated revenue increased 3.9% or $113.9 million to $3.1
billion in the third quarter.
- Gross average credit card receivables grew 7.1% over the same
period last year.
- Diluted EPS was $2.17 in the
quarter, up 21.2% or 16.5% over the third quarter of 2013 after
normalizing for the one-time costs associated with the formation of
CT REIT last year, reflecting strong revenue and gross margin
contribution from both the Retail and Financial Services
segments.
RETAIL SEGMENT OVERVIEW
- Retail segment revenue increased 3.5% or $94.6 million to $2.8
billion in the quarter.
- Income before income taxes in the Retail segment was up 3.7% or
$4.7 million to $130.8 million over
the third quarter last year.
- Canadian Tire Retail delivered growth across its categories
generating sales increases of 3.7% and same store sales of 3.2%
over the third quarter last year.
- FGL Sports saw retail sales increase 13.0% and same store sales
up 8.5% over the same quarter last year reflecting strong growth
across key banners. Sport Chek, its largest banner, achieved its
fourth quarter of double digit same store sales growth with an
increase of 11.2% in the third quarter.
- Mark's retail sales grew 6.5% and same store sales were up
6.8%.
- Petroleum sales decreased 0.4% in the quarter largely related
to a decline in gasoline volume, partially offset by higher gas
prices and an increase in non-gasoline sales.
CT REIT OVERVIEW
- As disclosed in the Q3 2014 CT
REIT release issued on November 3, 2014,
CT REIT completed five previously announced acquisitions in
the third quarter at a total cost of $124.2
million.
- In addition, the trustees of CT REIT approved an increase in
the rate of monthly distributions beginning in January 2015, representing a 2% increase and a
new annualized rate of $0.663.
FINANCIAL SERVICES OVERVIEW
- Financial Services posted third quarter gross average credit
card receivables growth of 7.1%, driven by growth in active
accounts and increased average account balances.
- Subsequent to the quarter, the Company's previously announced
strategic partnership with Scotiabank was completed. Scotiabank
acquired a 20% equity interest in the Company's financial services
business for $500 million in cash and
concluded a comprehensive co-marketing agreement expected to
attract new customers to the Company's retail businesses, providing
opportunities to drive significant growth for each partner.
CAPITAL EXPENDITURES
- Operating capital expenditures of $152.8
million in the quarter include investments in network growth
and digital technologies.
- Operating capital spending for 2014 is on track to be at the
higher end of the previously stated range of $500.0 million to $525.0 million, excluding
investments required for additional distribution capacity and to
fund CT REIT's growth strategy.
QUARTERLY DIVIDEND
- The Company announced earlier today that it has declared a 5%
increase in the quarterly dividend to $2.10 per share on each Common and Class A
Non-Voting share. The dividend is payable March 1, 2015 to Common and Class A Non-Voting
shareholders of record as of January 31,
2015. The dividend is considered an "eligible dividend" for
tax purposes.
NORMAL COURSE ISSUER BID UPDATE
- As at September 27, 2014, the
Company had completed its previously announced share repurchase
commitment and had repurchased 1,874,244 Class A Non-Voting Shares
at a cost of $200.0 million under its
normal course issuer bid.
- The Company will continue to acquire Class A Non-Voting Shares
under its 2014 normal course issuer bid, up to the maximum amount
permitted under the existing bid.
For additional information, refer to the
Company's Q3 2014 Management's Discussion and Analysis.
To view a PDF version of Canadian Tire
Corporation's full quarterly earnings report please see:
http://files.newswire.ca/116/CantireQ3MDAFSNotes.pdf
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 concerning the Company's anticipated benefits from its
partnership with Scotiabank under the heading "Financial Services
Overview", the Company's operating capital spending for 2014 under
the heading "Capital Expenditures", the Company's intention to
acquire Class A Non-Voting Shares under its 2014 normal course
issuer bid under the heading "Normal Course Issuer Bid Update" 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. 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. 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 more information on the risks, uncertainties
and assumptions that could cause the Company's actual results to
differ from current expectations, 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.
CONFERENCE CALL
Canadian Tire will conduct a conference call to
discuss information included in this news release and related
matters at 12:00 p.m. ET on
November 6, 2014. 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 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.
SOURCE CANADIAN TIRE CORPORATION, LIMITED