Strong Performance Across All Businesses Drives Q3 Growth at Canadian Tire Corporation

• 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

Related Links

http://www.canadiantire.ca