Canadian Tire Corp reported SportChek’s retail sales increased 3.0 percent in the second quarter as comparable sales grew 3.7 percent. On a consolidated basis, Canadian Tire’s comparable sales up 2.2 percent in the second quarter.
Companywide, Retail revenue increased 7.8 percent in Q2 and 6.7 percent year to date, excluding Petroleum. Diluted earnings per share (EPS) was C$2.87, an increase of 20.5 percent, normalized diluted EPS was C$2.97 up 13.8 percent
“Our top-line results this quarter and our continued momentum year-to-date position us well as we enter the second half of 2019. Our exclusive brands and products are clearly resonating with our customers, and through our Triangle Rewards loyalty and credit card programs they are engaging with us more often and shopping across our channels and banners, signaling the effectiveness of our growing Triangle marketplace,” said Stephen Wetmore, president and CEO, Canadian Tire Corporation. “We are executing well against our ambitious growth agenda. Our latest additions of Party City’s Canadian business, Paderno U.S., and several iconic bicycle brands, including Raleigh, Diamondback and Redline are perfect examples.”
“Over the past year, our teams have made excellent progress on our One company, One Customer strategy by investing in new business capabilities across CTC, including the launch of our Triangle Rewards loyalty and credit card programs, deliver-to-home at CTR, enhanced data analytics, improved digital experiences, and the addition of Helly Hansen to our consumer brands portfolio. While we will continue to make such investments to drive top-line growth, we are committed to a greater focus on bottom-line performance. High-quality investments and improved operational efficiencies will help us achieve our financial aspirations as we seek to become the #1 retail brand in Canada by 2022,” added Wetmore.
- Consolidated retail sales increased C$53.6 million or 1.3 percent in the second quarter. Excluding Petroleum, consolidated retail sales were up 2.3 percent over the same period last year.
- Consolidated revenue increased C$205.8 million, or 5.9 percent. Excluding Petroleum, consolidated revenue increased C$232.8 million, or 7.9 percent in the quarter.
- Diluted EPS was C$2.87, an increase of 20.5 percent, normalized diluted EPS was C$2.97 up 13.8 percent
- The following financial results reflect Q2 2019 performance compared to Q2 2018.
- Retail segment revenue increased 5.7 percent. Excluding Petroleum, retail segment revenue increased 7.8 percent.
- Canadian Tire saw retail sales increase 2.1 percent and comparable sales were up 1.9 percent.
- SportChek’s retail sales increased 3.0 percent and comparable sales increased 3.7 percent.
- Mark’s retail sales grew 2.7 percent and comparable sales increased 2.6 percent.
- Helly Hansen revenue in the quarter was C$98.6 million.
- Income before income taxes decreased C$10.8 million, normalized income before income taxes decreased C$11.8 million.
CT Reit Overview
- As disclosed in the Q2 2019 CT REIT earnings release on July 31, 2019, CT REIT announced new investments totalling C$29 million.
Financial Services Overview
- In Q2 2019, GAAR was up 8.3 percent over the prior year.
- Income before income taxes increased 33.7 percent in the second quarter to C$95.5 million, or 12.5 percent, normalized.
- Operating capital expenditures were C$116.1 million in the second quarter, up from C$100.8 million in the second quarter of 2018.
- Total capital expenditures increased C$17.0 million in Q2 2019, to C$126.5 million.
- The company has declared dividends payable to holders of Class A Non-Voting Shares and Common Shares at a rate of C$1.0375 per share payable on December 1, 2019 to shareholders of record as of October 31, 2019. The dividend is considered an “eligible dividend” for tax purposes.
- On November 8, 2018, the company announced its intention to repurchase a further C$300 to C$400 million of its Class A Non-Voting Shares, in excess of the amount required for anti-dilutive purposes, by the end of fiscal 2019. As at June 29, 2019, C$311.8 million of such shares had been repurchased.