Canadian Tire Corp. reported same-store sales  at its FGL Sports segment were up 6.2 percent in the third quarter. Same-store sales at Sport Chek increased 7.7 percent.

Company-wide, Canadian Tire Corp. reported third-quarter diluted earnings per share (EPS) of $2.44. Prior-year diluted EPS was $2.62, which included a real estate gain of 33 cents per share.

Consolidated Overview

  • Consolidated retail sales increased $115.5 million or 3.4 percent in the third quarter, including a 7.8 percent decline in Petroleum retail sales due to lower gas prices. Excluding Petroleum, consolidated retail sales were up 5.5 percent over the same period last year.
  • Excluding Petroleum, consolidated revenue increased $48.1 million or 1.8 percent in the quarter, and was up 3.5 percent year to date. Consolidated revenue increased 0.1 percent over the same period last year and was up 1.6 percent year to date.
  • Diluted EPS was $2.44 in the quarter, a decrease of 18 cents per share, or 6.7 percent versus the prior year, which included a real estate gain of 33 cents a share.

Retail Overview

  • Retail segment revenue increased 1.8 percent excluding Petroleum in the quarter, and was up 3.9 percent year to date.
  • Retail segment revenue decreased 0.1 percent in Q3 compared to last year and was up 1.7 percent year to date.
  • Retail gross margin rate, excluding Petroleum, increased 114 basis points.
  • Income before income taxes in the Retail segment was $162.2 million, down $20 million, or 11 percent in the third quarter of 2016, over 2015.
  • Canadian Tire Retail saw retail sales increase 4.9 percent and same store sales up 3.5 percent in the quarter over Q3 2015.
  • FGL Sports’ retail sales were up 8.5 percent and same store sales were up 6.2 percent in the third quarter of 2016. Same store sales at Sport Chek increased 7.7 percent.
  • Mark’s retail sales grew 4.4 percent and same store sales increased 4.3 percent compared to Q3 2015.

CT Reit Overview

  • As disclosed in the Q3 2016 CT REIT release issued November 1, 2016, CT REIT announced five additional investments, four acquisitions and one property intensification, for an estimated total investment of $74 million.
  • Additionally, CT REIT announced an increase in the annual rate of distribution to 70 cents per unit, an increase of 3 percent, commencing with the January 2017 payment date.

Financial Services Overview

  • Income before income taxes increased 0.6 percent in the third quarter to $96.1 million.
  • In Q3 2016, GAAR increased 2 percent over the prior year.
  • Financial Services continues to invest in the acquisition of new accounts through marketing and in-store financing programs to drive GAAR growth and sales at Canadian Tire Retail.

Capital Expenditures

  • Operating capital expenditures were $146.8 million in the third quarter, down from $181.9 in the prior year.
  • The company previously announced that it expected annual operating capital expenditures to be within the range of $625 million to $650 million for fiscal 2016. The company now expects operating expenditures for fiscal 2016 to be $475 million to $500 million.
  • For 2017, the company expects annual operating capital expenditures to be within the range of $400 million to $425 million.

Quarterly Dividend

  • The company has declared dividends payable to holders of Class A Non-Voting Shares and Common Shares at an increased rate of 65 cents per share payable on March 1, 2017 to shareholders of record as of January 31, 2017. The dividend is considered an “eligible dividend” for tax purposes.

Share Repurchase

  • On November 12, 2015, the company announced its intention to repurchase $550 million of its Class A Non-Voting Shares, in excess of the amount of shares to be purchased for anti-dilutive purposes, by the end of 2016. As at October 1, 2016, the company had repurchased $440 million, leaving $110 million intended to be repurchased during the remainder of fiscal 2016.
  • The company intends 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 fiscal 2017, subject to regulatory approval.