Canadian Tire rotates its brass

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This article was published 13/11/2009 (6032 days ago), so information in it may no longer be current.

TORONTO — Canadian Tire Corp. says it’s shuffling the leader of its financial services division to another role after posting a 22 per cent slide in overall profits partly because of higher loan losses in its banking business.

Chief executive Stephen Wetmore said Thursday that an internal management reorganization would move several executives to new positions in an effort to “drive customer-focused growth across the entire company.”

Marco Marrone, who has been president of Canadian Tire Financial Services and both president and CEO of Canadian Tire Bank, will now become the company’s chief financial officer, marking one of several changes in the executive ranks on Thursday.

Huw Thomas, who has been chief financial officer, has been named executive vice-president for financial strategy and performance. He’ll act as a senior strategic adviser to the chief executive.

The announcement came as the retailer, which sells a broad range of hardware, housewares, clothing and gasoline, reported a slide in overall net income to $85.4 million or $1.04 per share, from $109.1 million or $1.34 per share in the third quarter of 2008.

Revenue tumbled six per cent to $2.45 billion from $2.61 billion a year ago.

Adjusted earnings, which are more widely tracked by analysts, fell to $1.11 from $1.42.

The company’s performance beat analyst estimates of $2.15 billion in revenue and $1.08 per share of adjusted earnings, according to figures compiled by Thomson Reuters.

In retail, Canadian Tire quarterly sales slipped 2.3 per cent as unseasonably cool, wet weather dampened sales of garden and camping equipment. The tighter economy also slowed purchases of decor, electronics and storage products.

The financial services division reported earnings before income taxes dropped to $40.7 million from $52.7 million on higher loan losses partly related to bankruptcies.

“Despite the significant decrease in earnings at financial services, I continue to believe we are doing a good job in a very difficult operating environment,” Wetmore reassured analysts in a conference call.

“While the costs of writeoffs and bankruptcies are up significantly in the third quarter, our performance in this area continues to be better than virtually all of our peers due to our conservative growth strategies over the last two years and strong risk management capabilities.”

He added that the company is undergoing a plan to optimize margins, lower working capital — particularly its inventory — and meet funding requirements through to the end of the year.

— The Canadian Press