Canadian Tire Corporation, Limited reported consolidated retail sales increased 5.1 percent and consolidated revenues increased 4.1 percent for the period ended July 2, 2011, compared to Q2 2010. 


The Toronto-based retailer, which recently received clearance from Canadian anti-trust officials to acquire Forzani Group Ltd, said consolidated net income reached $105.8 million, or $1.30  basic earnings per share, compared to $122.8 million, or $1.51 last year.

 

Lower net income was largely due to planned increases in marketing and advertising expenditures, expenses related to strategic initiatives, lower than expected sales in certain seasonal categories and costs associated with the offer to purchase the Forzani Group Limited (FGL).

“In weather-related categories such as outdoor tools and gardening, we had a weak start to the quarter but finished with a strong June and with positive momentum continuing into July,” said Stephen Wetmore, President and CEO, Canadian Tire Corp. “Our earnings performance in the quarter reflected higher planned spending on growth initiatives, including Automotive Infrastructure and merchandising productivity, and were additionally impacted by lower than expected sales in certain seasonal categories and Forzani acquisition costs,” said Wetmore.

Retail
Retail sales grew 5.1 percent to $3.0 billion in Q2 2011 compared to the same period last year driven by increased revenues at Canadian Tire Gas (Petroleum) and higher sales at Canadian Tire Retail stores.
Retail sales at Canadian Tire Gas (Petroleum) locations increased 22.8 percent over the prior year, driven by a significant increase in pump prices over the previous year, and a 1.4 percent increase in gas volumes that are attributable primarily to the new petroleum sites located along the 400 series highways in Ontario.


Retail sales at Canadian Tire stores increased 1.9 percent in Q2 2011, an improvement versus the 1.3 percent increase recorded in Q2 2010. Increased retail sales in the Canadian Tire banner were driven by solid growth in the Living category, which saw strong sales in backyard living, kitchen, and household cleaning.

Growth in Living was partially offset by a decline in sales in Fixing, where categories like outdoor tools and gardening were negatively impacted by cool, wet weather at the start of the quarter.
The Automotive category in Canadian Tire stores posted another quarter of increased retail sales, reflected in strong growth in tires, parts and pressure washers. This trend reflects the results of the various initiatives aimed at driving growth in this heritage category.
Retail sales at Mark’s stores increased 0.5 percent over the prior year. Strong growth in the industrial wear category was offset by declines in men’s and women’s wear. Men’s and women’s wear categories felt the impact of the cooler weather in the beginning of the quarter, but gained momentum in June.

Retail segment net income before taxes decreased by $22 million or 18.3 percent, primarily due to increases in marketing and advertising expenditures, expenses related to strategic initiatives and costs associated with the offer to purchase FGL.

Canadian Tire Corporation, Limited is one of Canada’s most-shopped general retailers, offering everyday products and services to Canadians through more than 1,200 retail and gasoline outlets from coast-to-coast. Our primary retail business categories – Automotive, Living, Fixing, Playing and Apparel – are supported and strengthened by our Financial Services division, which offers such products and services as credit cards, retail deposits, in-store financing, product warranties, and insurance. Nearly 57,000 people are employed across the Canadian Tire enterprise, which was founded in 1922 and remains one of Canada’s most recognized and trusted brands.