Stock Name: CTC
Amount: CAD 0.30
Announcement Date: 10/11/2011
Record Date: 27/01/2012
Dividend Detail:
* Consolidated retail sales up 16%; basic earnings per share up 36%
* Quarterly dividend increased 9%
* Acquisition of The Forzani Group Ltd. (FGL Sports) completed
TORONTO, Nov. 10, 2011 /CNW/ - Canadian Tire Corporation, Limited (TSX:
CTC) (TSX: CTC.a) today released third quarter results for the period
ended October 1, 2011, and announced an increase in the quarterly
dividend.
Consolidated revenues rose 19.4% as a result of a strong 16.3% increase
in retail sales. Consolidated net income rose 35.9% to $136.5 million
from $100.5 million in the prior year and basic earnings per share rose
to $1.68 from $1.23. Included in this quarter's results were the
positive impacts from the inclusion of Forzani and a lower tax rate.
"I'm pleased with the positive results in the quarter. Customers
responded to our offerings, we managed our expenses effectively and
continued to execute our strategies. The strong cash flow from our
operations and our underlying confidence in our business has resulted
in an increase to the quarterly dividend," said Stephen Wetmore,
President and CEO of Canadian Tire Corporation.
"As we look ahead, I'm optimistic about the execution of our strategies
to strengthen our business for the future," continued Wetmore. "One of
these strategies was the acquisition of FGL Sports - a major addition
to our Company as we seek to become Canada's ultimate authority in
sports. The transition at FGL Sports is progressing very well and is
meeting our expectations - both in top line sales and realizing
synergies."
Consolidated financial results | | | | | | | | | | | | | | | | | | | | | |
($ in millions except per share amounts) | | | Q3 2011 | | | | Q3 2010 | | | Change | | | YTD 2011 | | | YTD 2010 | | | Change | ||
Retail sales | | $ | 2,921.0 | | | $ | 2,512.1 | | | 16.3% | | | $ | 7,888.9 | | | $ | 7,264.2 | | | 8.6% |
Revenue | | | 2,704.9 | | | | 2,266.1 | | | 19.4% | | | | 7,252.0 | | | | 6,624.8 | | | 9.5% |
EBITDA | | | 277.9 | | | | 245.6 | | | 13.1% | | | | 707.8 | | | | 711.4 | | | (0.5)% |
Net income | | | 136.5 | | | | 100.5 | | | 35.9% | | | | 300.7 | | | | 274.9 | | | 9.4% |
Basic earnings per share | | | 1.68 | | | | 1.23 | | | 36.1% | | | | 3.69 | | | | 3.37 | | | 9.6% |
Diluted earnings per share | | | 1.67 | | | | 1.23 | | | 36.2% | | | | 3.68 | | | | 3.35 | | | 9.6% |
RETAIL
The Company's quarterly results include FGL Sports for the first time,
commencing August 19, 2011. Consolidated retail sales rose 16.3% to
$2.9 billion compared to the same period last year with the inclusion
of FGL Sports sales of $218.4 million. Excluding FGL Sports,
consolidated retail sales and revenues remain strong, up 7.6% and
11.0%, respectively.
Retail sales at CTR stores increased 3.2% (same store 2.3%) over the
prior year driven by sales increases across all key categories.
Consumer traffic increased as a result of new product offerings and
strong marketing programs. Living and Playing category revenues were
particularly strong in the quarter primarily driven by kitchen, outdoor
recreational activities and cycling product lines. The Automotive
category continued its growth trajectory in the quarter which saw the
launch of an e-commerce site for tires.
Canadian Tire Gas (Petroleum) saw a 27.4% increase over the prior year,
driven by a significant increase in fuel prices over the prior year and
a 4.5% increase in volume.
Retail sales at Mark's increased 2.8% (same store 2.7%) over the prior
year, driven by its core strength in the industrial wear category. In
casual wear, summer clearance sales were strong, although the late
arrival of colder weather this fall compared to last year affected
sales in September. In the quarter, Mark's progressed with its
important store conversion program - a real estate and rebranding
project which has been launched in three markets, including 14 stores
in Calgary.
Compared to the same period last year, FGL Sports had retail sales
growth of 6.6% and same store sales growth of 7.3%. Sales were strong
across corporate and franchise stores and all corporate banners saw
positive growth with Sport Chek and Sports Experts performing well in
hard goods, apparel and footwear.
Retail segment net income before taxes increased 25.6% due to higher
sales, lower finance costs and the impact of FGL Sports.
FINANCIAL SERVICES
Financial Services continues to be a strong contributor to CTC earnings
and to the value proposition for Canadian Tire's customers. CTFS
revenue increased 0.5% in the quarter to $243.1 million compared to
$241.9 million in the prior year. As previously disclosed, Auto Club
services revenue was included in Financial Services in 2010 and is now
reported in Retail. Adjusting for this change, revenue in Financial
Services increased 2.7% due primarily to higher interest income on
credit card receivables.
Financial Services income before taxes increased $9.9 million or 18.3%
over the prior year due to the increased revenue, a reduction in loan
loss allowance as a result of improved portfolio aging, declining
insolvency and unemployment rates, and continued management of
operating expenses compared to the prior year.
The rolling 12-month net write-off rate on the credit card loan
portfolio was 7.33%, down from 7.72% in Q3 2010. The rolling 12-month
return on receivables was 5.10%, up from 5.02% in Q3 2010.
CAPITAL EXPENDITURES
Capital expenditures for the third quarter 2011 were $120.2 million
compared to Q3 2010 spending of $95.5 million. The increase was driven
primarily due to the timing of expenditures and total 2011 expenditures
are expected to be in line with previous estimates, excluding FGL
Sports.
QUARTERLY DIVIDEND
Canadian Tire Corporation has declared a quarterly dividend of 30 cents
per share on each Common and Class A Non-Voting share, up from 27.5
cents per share. The dividend is payable on March 1, 2012 to Common and
Class A shareholders of record as of January 31. 2012. The dividend is
considered an "eligible dividend" for tax purposes.
Please refer to Management's Discussion and Analysis for further detail
and information on the following charts.
Consolidated financial results | | | | | | | | | | | | | | | | | | | | | |
($ in millions except per share amounts) | | | Q3 2011 | | | | Q3 2010 | | | Change | | | YTD 2011 | | | YTD 2010 | | | Change | ||
Retail sales | | $ | 2,921.0 | | | $ | 2,512.1 | | | 16.3% | | | $ | 7,888.9 | | | $ | 7,264.2 | | | 8.6% |
Revenue | | | 2,704.9 | | | | 2,266.1 | | | 19.4% | | | | 7,252.0 | | | | 6,624.8 | | | 9.5% |
Gross margin | | | 780.6 | | | | 698.3 | | | 11.8% | | | | 2,121.9 | | | | 2,016.9 | | | 5.2% |
Operating expenses | | | 588.7 | | | | 521.3 | | | 12.9% | | | | 1,636.2 | | | | 1,509.1 | | | 8.4% |
EBITDA | | | 277.9 | | | | 245.6 | | | 13.1% | | | | 707.8 | | | | 711.4 | | | (0.5)% |
Depreciation and amortization | | | 75.8 | | | | 69.5 | | | 9.2% | | | | 209.5 | | | | 203.6 | | | 2.9% |
Net finance costs | | | 32.1 | | | | 37.6 | | | (14.9)% | | | | 99.3 | | | | 116.8 | | | (15.0)% |
Net income | | | 136.5 | | | | 100.5 | | | 35.9% | | | | 300.7 | | | | 274.9 | | | 9.4% |
Basic earnings per share | | | 1.68 | | | 1.23 | | | 36.1% | | | | 3.69 | | | | 3.37 | | | 9.6% | |
Diluted earnings per share | | | 1.67 | | | | 1.23 | | | 36.2% | | | | 3.68 | | | | 3.35 | | | 9.6% |
| | | | | | | | | | | | | | | | | | | | | |
Retail Segment financial results | | | | | | | | | | | | | | | | | | | | | |
($ in millions) | | | Q3 2011 | | | | Q3 2010 | | | Change | | | YTD 2011 | | | YTD 2010 | | | Change | ||
Retail sales | | $ | 2,921.0 | | | $ | 2,512.1 | | | 16.3% | | | $ | 7,888.9 | | | $ | 7,264.2 | | | 8.6% |
Revenue | | | 2,443.8 | | | | 2,004.8 | | | 21.9% | | | | 6,488.6 | | | | 5,853.0 | | | 10.9% |
Gross margin | | | 617.5 | | | | 538.3 | | | 14.7% | | | | 1,662.8 | | | | 1,548.9 | | | 7.4% |
Operating expenses | | | 505.3 | | | | 431.2 | | | 17.2% | | | | 1,386.9 | | | | 1,251.0 | | | 10.9% |
EBITDA | | | 195.5 | | | | 173.2 | | | 12.8% | | | | 490.3 | | | | 496.7 | | | (1.3)% |
Depreciation and amortization | | | 73.0 | | | | 66.8 | | | 9.4% | | | | 201.5 | | | | 197.2 | | | 2.1% |
Net finance costs | | | 16.7 | | | | 22.2 | | | (25.1)% | | | | 53.2 | | | | 67.8 | | | (21.6)% |
Income before income taxes | | | 105.8 | | | | 84.2 | | | 25.6% | | | | 235.6 | | | | 231.7 | | | 1.7% |
FGL Sports - sales metrics | | | | | | | | | | | | |
| | | Aug 21, 2011 | | | Aug 22, 2010 | | | Aug 21, 2011 | | | Aug 22, 2010 |
| | | to Oct 1, 2011 | | | to Oct 2, 2010 | | | to Oct 1, 2011 | | | to Oct 2, 2010 |
FGL Sports retail sales growth | | | 6.6% | | | n/a | | | 6.6% | | | n/a |
FGL Sports same store sales growth | | | 7.3% | | | n/a | | | 7.3% | | | n/a |
Number of FGL Sports stores | | | 528 | | | n/a | | | 528 | | | n/a |
| | | | | | | | | | | | |
Retail Segment - by banner | | | | | | | | | | | | |
| | | Q3 2011 | | | Q3 2010 | | | YTD 2011 | | | YTD 2010 |
CTR retail sales growth | | | 3.2% | | | 2.0% | | | 1.7% | | | 1.8% |
CTR same store sales growth | | | 2.3% | | | 1.4% | | | 0.8% | | | 1.1% |
Number of CTR stores | | | 486 | | | 482 | | | 486 | | | 482 |
| | | | | | | | | | | | |
Mark's retail sales growth | | | 2.8% | | | 4.5% | | | 3.0% | | | 4.9% |
Mark's same store sales growth | | | 2.7% | | | 2.4% | | | 2.9% | | | 2.2% |
Number of Mark's stores | | | 385 | | | 383 | | | 385 | | | 383 |
| | | | | | | | | | | | |
Canadian Tire Gas gasoline volume (litres) growth | | | 4.5% | | | 2.7% | | | 3.4% | | | 0.4% |
Number of gas bars | | | 291 | | | 283 | | | 291 | | | 283 |
| | | | | | | | | | | | | | | | | | | | | |
Financial Services' financial results | | | | | | | | | | | | | | | | | | | | | |
($ in millions) | | | Q3 2011 | | | | Q3 2010 | | | Change | | | YTD 2011 | | | YTD 2010 | | | Change | ||
Total gross average receivables | | $ | 4,061.1 | | | $ | 4,049.3 | | | 0.3% | | | $ | 4,026.7 | | | $ | 4,042.2 | | | (0.4)% |
Revenue | | | 243.1 | | | | 241.9 | | | 0.5% | | | | 711.7 | | | | 715.9 | | | (0.6)% |
Gross margin | | | 145.1 | | | | 140.6 | | | 3.1% | | | | 407.4 | | | | 412.1 | | | (1.1)% |
Operating expenses | | | 65.4 | | | | 70.7 | | | (7.5)% | | | | 197.6 | | | | 202.2 | | | (2.3)% |
EBITDA | | | 82.4 | | | | 72.4 | | | 13.9% | | | | 217.5 | | | | 214.7 | | | 1.4% |
Depreciation and amortization | | | 2.8 | | | | 2.7 | | | 4.5% | | | | 8.0 | | | | 6.4 | | | 26.7% |
Net finance costs | | | 15.4 | | | | 15.4 | | | (0.2)% | | | | 46.1 | | | | 49.0 | | | (5.9)% |
Income before income taxes | | | 64.2 | | | | 54.3 | | | 18.3% | | | | 163.4 | | | | 159.3 | | | 2.6% |
| | | | | | | | | | | | | | | | | | | | | |
To view a PDF version of Canadian Tire Corporation's full quarterly
earnings report please see: http://files.newswire.ca/116/Q32011IRCTC.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
financial position, results of operation and operating
environment.Readers are cautioned that such information may not be
appropriate for other circumstances.
All statements other than statements of historical facts included in
this document may constitute forward-looking information, including but
not limited to, 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", "believe",
"estimate", "plan", "could", "should", "would", "outlook", "forecast",
"anticipate", "foresee", "continue" or the negative of these terms or
variations of them or similar terminology.Forward-looking information
is based on the reasonable assumptions, estimates, analysis 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 statements are made.
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 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 and assumptions
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 Canadian Tire to attract and retain quality employees,
Dealers, Canadian Tire Petroleum agents and PartSource, Mark's Work
Wearhouse and FGL Sports store operators and 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)
risks and uncertainties relating to information management, technology,
supply chain, product safety, changes in law, competition, seasonality,
commodity price and business disruption, our relationships with
suppliers and manufacturers, changes to existing accounting
pronouncements, the risk of damage to the reputation of brands promoted
by Canadian Tire and the cost of store network expansion and retrofits
and (f) our capital structure, funding strategy, cost management
programs and share price.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 2010 and our 2010 Management's Discussion
and Analysis, as well as Canadian Tire'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,
unless 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 4:30 p.m. EST on
November 10, 2011. 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
Canadian Tire Corporation, Limited (TSX: CTC.a) (TSX: CTC) is one of
Canada's most-shopped general retailers and the country's largest
sporting goods retailer, with more than 1,700 retail and gasoline
outlets from coast-to-coast. Our primary retail business categories -
Automotive, Living, Fixing, Sports, Playing and Apparel - are supported
and strengthened by our Financial Services division, which offers such
products and services as Canadian Tire Home Services, credit cards,
retail deposits, in-store financing, product warranties, and insurance.
Nearly 68,000 people are employed across the Canadian Tire enterprise,
which was founded in 1922 and remains one of Canada's most recognized
and trusted brands.
PDF with caption: "Q3 2011 Interim Report CTC". PDF available at: http://stream1.newswire.ca/media/2011/11/10/20111110_C4422_DOC_EN_6449.pdf
For further information:
Media: Rob Nicol, 416-480-8414robert.nicol@cantire.com
Investors: Angela McMonagle, 416-480-8225angela.mcmonagle@cantire.com
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