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Winnipeg Free Press - PRINT EDITION
Canadian Tire's profits jump, earnings beat analysts' expectations
CANADIAN Tire capped off a strong first half of 2012 with a 25 per cent jump in second-quarter profits from a year ago, and says it's ready to take on its competition during the latter part of the year.
"We got off to a strong start in the first three months of this year, and that momentum has followed through into the second quarter, with positive growth in the retail segment and another excellent quarter for financial services," CEO Stephen Wetmore told analysts Thursday.
The retailer said Thursday it earned $133.7 million or $1.63 per diluted share in the second quarter, up from $105.8 million or $1.29 per diluted share a year ago. Revenue grew to $2.99 billion, up from $2.57 billion. The average analyst estimate had been for a profit of $1.52 per share and revenue of $3 billion, according to Thomson Reuters.
Wetmore said Canadian Tire expects the fall and winter season to bring stiff competition, as usual.
"We are well positioned for what promises to be a highly competitive retail environment in Canada in the second half of the year, with continued liquidations and closures by some players and new store openings by others," Wetmore said.
"We continue to be on offence, focused on our long-term strategic imperatives, making good progress quarter by quarter and preserving market share in our key categories."
The results for the quarter included $22.7 million of pre-tax costs related to the closure of more than 100 underperforming sports-equipment stores under several different banners as part of changes at its FGL Sports business.
Canadian Tire announced in May a plan to close Sport Mart, Athletes World and Nevada Bob's Golf stores, while adding more than 100 Sport Chek and Atmosphere locations over the next five years.
Retail sales at its namesake Canadian Tire stores were up one per cent while same-store sales gained 0.4 per cent in the quarter, helped by strong sales in seasonal categories and continued growth in home accessories, hardware and sports.
Canadian Tire is one of Canada's leading retailers and the country's largest sporting goods retailer, with more than 1,700 retail and gasoline outlets employing some 58,000 people.
-- The Canadian Press
Republished from the Winnipeg Free Press print edition August 10, 2012 B12
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