Canadian Tire Corporation Reports Strong First Quarter Results

Canadian Tire Corporation Reports Strong First Quarter Results

Results from our first quarter:
Diluted earnings per share (EPS) was $1.24, up 37.8%
Financial Services GAAR growth up 5.8%
Retail revenue increased 8.5%, or 6.8% excluding Petroleum
Same store sales:
Canadian Tire up 0.5%
Mark's up 5.4%
FGL Sports down 2.7% (down 4.3% at Sport Chek)

TORONTO, May 11, 2017 /CNW/ - Canadian Tire Corporation, Limited (TSX:CTC, TSX:CTC.A) today released first quarter results for the period ended April 1, 2017.

"We have delivered strong earnings performance in both our Financial Services and Retail segment, and in particular we saw strong revenue growth at CTR. The organization is focused on the right initiatives for 2017 and we have good momentum leading into our primary selling seasons," said Stephen Wetmore, President and CEO, Canadian Tire Corporation.

CONSOLIDATED OVERVIEW
Consolidated retail sales increased $95.0 million or 3.8% in the first quarter. Excluding Petroleum, consolidated retail sales were up 1.4% over the same period last year.
Consolidated revenue increased $194.1 million, or 7.6%, which includes a $62.4 million increase in Petroleum revenue resulting from higher per litre gas prices. Excluding Petroleum, consolidated revenue increased $131.7 million, or 6.0% in the quarter.
Diluted EPS was $1.24 in the quarter, an increase of $0.34 per share, or 37.8%, over the first quarter of 2016.

RETAIL OVERVIEW
Retail segment revenue increased 8.5% in the first quarter compared to last year. Excluding Petroleum, retail segment revenue increased 6.8% in Q1.
Retail margin rate excluding Petroleum was relatively flat to the prior year, down 7 bps.
Income before income taxes increased $23.8 million, or 115.3% over the first quarter of 2016.
Canadian Tire Retail saw retail sales increase 2.0% and same store sales were up 0.5% compared to the prior year.
FGL Sports' retail sales were down 1.4% and same store sales were down 2.7% in the first quarter of 2017. Same store sales at Sport Chek were down 4.3%.
Mark's retail sales grew 5.7% and same store sales increased 5.4% compared to the same period last year.

CT REIT OVERVIEW
As disclosed in the Q1 2017 CT REIT earnings release on May 9, 2017, CT REIT announced four investments made in the quarter at an estimated total cost of $42 million.

FINANCIAL SERVICES OVERVIEW
Income before income taxes increased 4.3% in the first quarter to $97.6 million.
In Q1 2017, gross average credit card receivables (GAAR) was up 5.8% over the prior year.

CAPITAL EXPENDITURES
Operating capital expenditures were $68.1 million in the first quarter, down from $86.5 million in the first quarter of 2016.
As previously announced, the Company expects its three-year annual operating capital expenditure investment to be within the range of $450 million to $500 million.

QUARTERLY DIVIDEND
The Company has declared dividends payable to holders of Class A Non-Voting Shares and Common Shares at a rate of $0.65 per share payable on September 1, 2017 to shareholders of record as of July 31, 2017. The dividend is considered an "eligible dividend" for tax purposes.

SHARE REPURCHASE
On November 10, 2016, the Company announced its intention to repurchase $550.0 million of its Class A Non-Voting Shares, in excess of the amount required for anti-dilutive purposes by the end of 2017. As at April 1, 2017 the Company had repurchased $137.5 million, leaving $412.5 million to be repurchased during the remainder of fiscal 2017.

NORMAL COURSE ISSUER BID UPDATE
On February 23, 2017, the Toronto Stock Exchange accepted the Company's notice of intention to make a normal course issuer bid to purchase up to 6.0 million Class A Non-Voting Shares between March 2, 2017 and March 1, 2018.