- Same store sales up in all retail banners:
- 3.2% at Canadian Tire
- 4.8% at FGL Sports (8.6% at Sport Chek)
- 2.9% at Mark's
- Financial Services income before taxes up 5.8%
- Diluted EPS was $2.15, up 1.3%,
despite an $0.18 reduction due to the
Financial Services transaction in 2014
TORONTO, Aug. 13, 2015 /CNW/ - Canadian Tire Corporation,
Limited (TSX:CTC, TSX:CTC.a) today released second quarter results
for the period ended July 4,
2015.
"Our sales performance this quarter demonstrates the strength in
our business and our continued momentum. Canadian Tire is
operationally stronger than a year ago, but our solid sales and
productivity gains are masked by the dramatic fall of the Canadian
dollar and impacted by certain one time items that benefitted us in
2014," said Michael Medline, President and CEO, Canadian Tire
Corporation. "I'm pleased that our operating performance and
productivity initiatives have gained significant traction and are
generating tangible results, which will continue to serve us well
over the long term."
CONSOLIDATED OVERVIEW
- Excluding Petroleum, consolidated revenue increased
$166.1 million, or 6.3%. Despite
lower gas prices, consolidated revenue increased 2.9% or
$91.6 million versus the prior
year.
- Gross average credit card receivables grew 4.4% over the same
period last year.
- Diluted EPS was $2.15, up 1.3%,
and reflects an $0.18 reduction due
to the Financial Services transaction in 2014. After
normalizing for the premium related to the early redemption of
corporate medium term notes in the prior year, diluted EPS would
have been down 4.9%.
RETAIL OVERVIEW
- Excluding Petroleum, Retail segment revenue increased 6.4% over
the same period last year primarily due to increased product
shipments to Dealers at Canadian Tire and higher retail sales at
FGL Sports and Mark's. Including Petroleum, Retail segment
revenue increased 2.6% in the quarter.
- Income before income taxes in the Retail segment was
$152.8 million, up 2.2% over the
second quarter last year. Normalizing for the early
redemption of the medium-term notes in the prior year, income
before income taxes would have been down 7.2%.
- Canadian Tire Retail saw retail sales increase 7.1%, bolstered
by strong sales at the Canadian Tire Showcase store in South
Edmonton Commons which opened June 1,
2015, and same store sales were up 3.2% over the same period
last year.
- FGL Sports' retail sales and same store sales grew 6.8% and
4.8% respectively, over the same period last year. Same store sales
at Sport Chek were up 8.6% in the second quarter, reflecting recent
investment and expansion of the Sport Chek banner.
- Mark's retail sales grew 2.4% and same store sales were up
2.9%.
CT REIT OVERVIEW
- As disclosed in the Q2 2015 CT
REIT release issued August 11, 2015,
CT REIT completed four previously announced property
investments, one development land investment and five
intensifications in the second quarter at a total cost of
$73.1 million.
- CT REIT also announced a further five investments in
acquisitions, development and property intensifications, all of
which are properties which will ultimately include Canadian Tire
stores and will require an estimated total investment of
$45.2 million.
FINANCIAL SERVICES OVERVIEW
- Financial Services posted second quarter gross average credit
card receivables growth of 4.4%.
- Income before income taxes rose 5.8% to $97.7 million.
CAPITAL EXPENDITURES
- Capital expenditures were $161.5
million in the second quarter, up 22% over the prior year.
The increase in capital expenditures is largely due to spending on
distribution capacity relating to the Bolton DC, for which
construction began in the spring of 2014.
- Operating capital expenditures in 2015 are expected to be
within a range of $600 million to $625
million, primarily due to increased spending on the retail
network expansion, including the FGL Sports growth strategy, and
significant investments in digital and technology initiatives. The
Company expects capital expenditures for additional distribution
capacity to be in the range of $175 million
to $200 million in 2015. These amounts do not include
acquisitions of third-party properties by CT REIT as part of its
growth strategy.
Capital Expenditure Guidance Update
- While the Company remains on track to meet its previously
disclosed 2015 capital expenditures within the range of
$600 million to $625 million, the
Company now expects its three-year average annual operating capital
expenditures between fiscal 2015 and 2017 to increase from
$575 million to between $600 million and $625 million as a result of
increased capital project spending relating to the acquisition of
12 real estate leases, formerly held by Target Canada, during the
quarter.
QUARTERLY DIVIDEND
- The Company has declared dividends payable to holders of Class
A Non-Voting Shares and Common Shares at a rate of $0.525 per share payable on December 1, 2015 to shareholders of record as of
October 31, 2015. The dividend is
considered an "eligible dividend" for tax purposes.
SHARE REPURCHASE
- On October 9, 2014, the Company
announced that it intended to repurchase $400 million of its Class A Non-Voting Shares in
excess of the amount required for anti-dilutive purposes through to
the end of 2015. As at July 4, 2015
the Company had repurchased $244.3
million towards this commitment, leaving $155.7 million remaining to be repurchased by the
end of the year.
For additional information, refer to the Company's Q2 2015
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/CTC_Q2_MDA_FS_Notes.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 expectations with respect to its operating capital
expenditures including expenditures for additional distribution
capacity for 2015 under the headings "Capital Expenditures" and
"Capital Expenditure Guidance Update", the Company's intention
regarding the repurchase of its Class A Non-Voting Shares
under the heading "Share Repurchase" 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, 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 2.10 (Risk Factors) of our
Annual Information Form for fiscal 2014 and to sections 6.4.1.3
(Retail segment business risks), 6.4.2.3 (CT REIT segment business
risks), 6.4.3.3 (Financial Services segment business risks) and
10.0 (Enterprise Risk Management) and all subsections thereunder of
our 2014 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 August 13, 2015. 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