- Same store sales:
- Canadian Tire up 3.4%
- FGL Sports up 7% (8.5% at Sport Chek)
- Mark's down 0.2%
- GAAR growth for Financial Services up 1.7%
- Diluted EPS was $2.62, up 20.5%
- 9.5% increase in the annual dividend to $2.30 per share on each Common and Class A Non-Voting share
- Intent to repurchase $550 million of Class A Non-Voting shares by the end of 2016
"Our first priority is to put the numbers on the board and we certainly achieved that this quarter. Our solid top and bottom line performance demonstrates the strength of the Company's operations and retail fundamentals, especially at our core Canadian Tire stores," said Michael Medline, President and CEO, Canadian Tire Corporation.
- Consolidated revenue increased $133.2 million, or 5.3%, excluding Petroleum. Consolidated revenue increased 1.9% or $56.9 million versus the prior year, and reflects the impact of lower year-over-year gas prices at Petroleum.
- Gross average credit card receivables grew 1.7% over the same period last year.
- Diluted EPS was $2.62, up 20.5%, buoyed by a real estate gain that contributed $0.33 per share and despite an $0.18 reduction due to the Financial Services transaction in 2014.
- Retail segment revenue increased 5.9% over the same period last year, excluding Petroleum, primarily due to higher shipments to Dealers at Canadian Tire and retail sales at Canadian Tire, FGL Sports and Mark's. Retail segment revenue, including Petroleum, was up 2% in the quarter, reflecting lower year-over-year gas prices.
- Income before income taxes in the Retail segment was $182.2 million, up 39.3% over the third quarter last year. Excluding the gain on a real estate transaction, income before income taxes was $153 million, up 17% over the prior year.
- Canadian Tire's sales increased 1.5%, while same store sales were up 3.4% over the same period last year.
- FGL Sports' sales and same store sales grew 6.5% and 7% respectively, over the same period last year. Same store sales at Sport Chek were up 8.5% in the third quarter reflecting recent investment and network expansion.
- Mark's sales grew 2.7% and same store sales were down 0.2% over the prior year.
CT REIT OVERVIEW
- As disclosed in the Q3 2015 CT REIT release, issued November 9, 2015, the trustees of CT REIT approved an increase in the rate of monthly distributions beginning January 2016, representing a 2.56% increase and a new annualized rate of $0.68.
FINANCIAL SERVICES OVERVIEW
- Financial Services posted third quarter gross average credit card receivables growth of 1.7%.
- Income before income taxes was down 2.8% to $95.6 million.
- Capital expenditures were $226.4 million in the third quarter, down $63.9 million over the prior year. The decline in capital expenditures is primarily due to lower year-over-year CT REIT third party acquisitions; partially offset by increased spending on distribution capacity relating to the Bolton DC, as well as increased capital spending on IT initiatives including the Company's digital strategy.
CAPITAL EXPENDITURE GUIDANCE UPDATE
- As previously disclosed, the Company expects its three-year average annual operating capital expenditures between fiscal 2015 and 2017 to be between $600 million and $625 million.
- Operating capital expenditures in 2015 are expected to be within a range of $600 million to $625 million, primarily due to increased spending on the retail network expansion, including the FGL Sports growth strategy, and significant investments in digital and technology initiatives.
- The Company previously announced that it expected capital for additional distribution capacity to be in the range of $175 million to $200 million in 2015. The Company now expects these capital expenditures to fall below the lower end of the range due to a shift in the timing of spend to 2016.
- The Company has declared dividends payable to holders of Class A Non-Voting Shares and Common Shares at a rate of $0.575 per share payable on March 1, 2016 to shareholders of record as of January 31, 2016. The dividend is considered an "eligible dividend" for tax purposes.
- On October 9, 2014, the Company announced that it intended to repurchase $400 million of its Class A Non-Voting Shares in excess of the amount required for anti-dilutive purposes by the end of 2015. As at October 3, 2015, the Company had completed its full repurchase commitment.
- The Company has announced its intention to repurchase a further $550 million of its Class A Non-Voting Shares in excess of the amount required for anti-dilutive purposes by the end of 2016, subject to regulatory approval.
AUTOMATIC SHARE PURCHASE PLAN
- The Company also announced that it will enter into an automatic share purchase plan ("ASPP") with its designated broker. The ASPP will allow for purchases of CTC's Class A Non-Voting Shares under the Company's current normal course issuer bid ("NCIB") at times when the Company ordinarily would not be active in the market due to its own internal trading black-out periods or under applicable Canadian securities laws. Pursuant to the ASPP, before entering into a black-out period, the Company may, but is not required to, instruct the designated broker to make purchases of Class A Non-Voting Shares under the NCIB during the ensuing black-out period. Any such instructions will be subject to specified limits, including price, volume and frequency, as determined by the Company. Within these specified limits, the designated broker has discretion with respect to the purchase of the shares under the NCIB during the black-out period in accordance with the rules of the Toronto Stock Exchange.
- The ASPP will commence on November 13, 2015 and terminate on the earliest of the date on which: (a) the purchase limit specified in the ASPP has been reached; (b) the NCIB expires; and (c) the Company terminates the ASPP in accordance with its terms. The ASPP constitutes an "automatic securities purchase plan" under applicable Canadian securities laws and has been approved by the Toronto Stock Exchange.
For additional information, refer to the Company's Q3 2015 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/CTC_MDA_and_FS_and_Notes_Q3_2015.pdf
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 expectations with respect to its three-year average annual operating expenditures between fiscal 2015 and 2017 and its operating capital expenditures in 2015, including capital expenditures for additional distribution capacity, under the heading"Capital Expenditure Guidance Update", statements concerning the Company's intention with respect to the amount of its Class A Non-Voting Shares to be repurchased in excess of the amount required for anti-dilutive purposes by the end of 2016 under the heading "Share Repurchase", statements concerning the Company's intention to enter into an ASPP pursuant to which the Company's designated broker may purchase Class A Non-Voting Shares under the NCIB during the Company's internal trading black-out periods under the heading "Automatic Share Purchase Plan", 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, risks and uncertainties 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 section 2.10 (Risk Factors) of our Annual Information Form for fiscal 2014 and to sections 184.108.40.206 (Retail segment business risks), 220.127.116.11 (CT REIT segment business risks), 18.104.22.168 (Financial Services segment business risks) and 10.0 (Enterprise Risk Management) and all subsections thereunder of our 2014 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.
Canadian Tire will conduct a conference call to discuss information included in this news release and related matters at 1:00 p.m. ET on November 12, 2015. 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 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