• Same store sales up 2.8% at Canadian Tire, 8.2% at FGL Sports and 3.2% at Mark's
• Consolidated diluted EPS up 11.0% or 18.2% after normalizing for the one-time costs associated with the early redemption of medium-term notes

TORONTO, Aug. 7, 2014 /CNW/ - Canadian Tire Corporation, Limited (TSX:CTC, TSX:CTC.a) today released second quarter results for the period ended June 28, 2014, reflecting solid revenue, sales and margin growth.

"The second quarter is an important one for Canadian Tire as families get ready to spend more time outdoors or tackle jobs around the home after a long winter. Performance at Canadian Tire was strong across all categories, particularly given the late arrival of spring weather," said Stephen Wetmore, CEO, Canadian Tire Corporation.  

"FGL Sports' core banner, Sport Chek, continued to post impressive results in a very competitive retail landscape and had its third consecutive quarter of double-digit same store sales growth. When we look at Financial Services, it exceeded our expectations again which is impressive given that its 2013 comparable was so strong," continued Wetmore.

CONSOLIDATED OVERVIEW

• Consolidated revenue increased 4.8% or $145.0 million to $3.2 billion in the second quarter.
• Consolidated retail sales in the quarter increased 4.8% or $170.2 million, to $3.7 billion over the same period last year.
• Diluted EPS was $2.12 in the quarter, up 11.0% or 18.2% after normalizing for the one-time costs associated with the early redemption of medium-term notes.
• Consolidated earnings performance reflects strong revenue and gross margin contributions from the Retail segment as well as solid margin performance at Financial Services from increased revenue on gross average accounts receivable growth. 

RETAIL SEGMENT OVERVIEW

• Retail segment revenue increased 4.7% or $129.9 million to $2.9 billion in the quarter.
• Income before income taxes in the Retail segment was up 22.7% or $27.8 million, to $149.6 million over the second quarter last year. After normalizing for the one-time costs associated with the early redemption of medium-term notes, income before income taxes increased 35.0%.
• Retail sales at Canadian Tire were up 3.4% over the second quarter last year and same store sales increased 2.8% with solid sales across key seasonal and non-seasonal categories.
• FGL Sports saw retail sales increase 13.7% and same store sales up 8.2% over the same period last year, reflecting strong growth across key banners and categories. Same store sales at Sport Chek increased 10.8% in the second quarter.
• Mark's retail sales grew 2.6% and same store sales were up 3.2% over the same period last year, driven by strong sales of industrial and men's apparel and footwear sales.
• Petroleum sales were up 5.3% in the quarter largely related to higher gasoline prices and increased non-gasoline sales.

CT REIT OVERVIEW

• As disclosed in the Q2 2014 CT REIT release issued on August 5, 2014, CT REIT closed seven acquisitions at a total cost of $94.1 million.
• Subsequent to the quarter end, CT REIT completed two acquisitions. CT REIT and Oxford Properties each acquired a one-third leasehold interest in Canada Square, a mixed-use commercial development at the intersection of Yonge Street and Eglinton Avenue in Toronto, Ontario which houses CTC's head office. In addition, on July 30, 2014, CT REIT acquired a 201,000 square foot distribution centre in Calgary, Alberta, located on Dufferin Place in the south east quadrant of the city.
• These two investments combined represent approximately $90.0 million dollars including transaction costs to CT REIT.

FINANCIAL SERVICES OVERVIEW

• Financial Services' gross average receivable (GAAR) second quarter growth of 7.4% is primarily attributed to increased average balances and a higher number of active accounts over the prior period.

CAPITAL EXPENDITURES

• Capital investments increased by $51.4 million in the quarter over the same period last year reflecting higher investments in the distribution centre, and for technology initiatives. Capital spending for 2014 is on track to be at the higher end of the previously stated range of $575.0 million and $625.0 million, excluding any future investment required to support CT REIT's growth strategy.

QUARTERLY DIVIDEND

• Canadian Tire Corporation has declared a quarterly dividend of $0.50 per share on each Common and Class A Non-Voting share. The dividend is payable December 1, 2014 to Common and Class A Non-Voting shareholders of record as of October 31, 2014. The dividend is considered an "eligible dividend" for tax purposes.

NORMAL COURSE ISSUER BID UPDATE

• As at June 28, 2014, the Company had purchased 1,078,244 Class A Non-Voting Shares at a cost of $110.2 million towards its intended $200.0 million share repurchase under its normal course issuer bid.

For additional information, refer to the Company's Q2 2014 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/Cantire_English_8-6.pdf

FORWARD-LOOKING STATEMENTS

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 CAPEX spending under the heading "Capital Expenditures" 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 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, please refer to the "Risk Factors" section of our Annual Information Form for fiscal 2013 and to sections 7.4.1.3 (Retail segment business risks), 7.4.2.3 (CT REIT segment business risks), 7.4.3.3 (Financial Services segment business risks) and 11.0 (Enterprise Risk Management) and all subsections thereunder of our 2013 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.

CONFERENCE CALL
Canadian Tire will conduct a conference call to discuss information included in this news release and related matters at 12:00 p.m. ET on August 7, 2014. 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 nearly 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

PDF available at: http://stream1.newswire.ca/media/2014/08/07/20140807_C2414_PDF_EN_4715.pdf