A customer stands with his trolley at a Canadian Tire Store in Mississauga on Thursday December 11 2014. Strong sales of winter tires, Christmas decorations and sports equipment helped Canadian Tire Corp. deliver better fourth-quarter results, as its stock jumped to an all-time high. THE CANADIAN PRESS/Chris Young
Republished February 26, 2015 - 12:41 PM
Original Publication Date February 26, 2015 - 5:05 AM
TORONTO - Although winter tires and Christmas decorations were some of Canadian Tire Corp.'s bestsellers in the fourth quarter, the retailer's president and CEO says the company doesn't need to rely on seasonal sales like it once did.
Michael Medline told analysts on Thursday that unpredictable seasonal weather isn't quite make-or-break for Canadian Tire anymore.
That means if snowblowers aren't rolling out of stores during a mild winter, or if a rainy summer fails to light a fire under barbecue sales, the impact won't leave a massive dent in the financial results.
"Across all of our core retail banners, we have taken positive steps to weatherproof the businesses as much as we can," he said on a conference call.
"We saw these efforts pay off as we had strong performance in non-seasonal categories."
Canadian Tire (TSX:CTC.A) has been rejigging its product lines to bring in a selection that appeals to younger demographics. A new home decor line and wider selection of kids' toys are two recent changes that improved fourth-quarter results, and will sell regardless of rain, snow or sunshine.
The company reported that profits rose to $206.6 million, or $2.44 per diluted share, in the three months ended Jan. 31, versus $191 million or $2.32 per diluted share at the same time last year.
The results came in seven cents better than analysts expected, according to a survey by Thomson Reuters.
Shares of Canadian Tire soared almost eight per cent, or $9.49, to $132.08 in afternoon trading on the Toronto Stock Exchange. Earlier in the session they hit a record high of $133.19 a share.
Revenue totalled $3.65 billion, up from $3.33 billion in the fourth quarter of 2013, which was one week shorter.
Same-store sales at Canadian Tire stores grew 2.8 per cent helped by its winter tire business. Those at its FGL Sports banners were up 4.9 per cent, driven by an increase of 9.4 per cent at Sport Chek. However, the sports retailer saw its margins squeezed when it discounted prices to lure customers during the milder winter weather in December.
Its Mark's clothing chain reported same-store sales up 1.2 per cent.
Irene Nattel, an analyst with RBC Capital Markets, said the results from Canadian Tire's retail operations were better than expected, helped by the recent product selection changes.
"The simultaneous repositioning and remerchandising of key retail categories across all banners, and focus on productivity, is enabling Canadian Tire to deliver sector-leading performance," she wrote in a note.
Canadian Tire operates under several banners in addition to its namesake stores including Mark's, PartSource, Sport Chek, Hockey Experts, Sports Experts, National Sports, Intersport, Pro Hockey Life and Atmosphere. The company also has a financial services division and property holdings through its stake in CT REIT (TSX:CRT).
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News from © The Canadian Press, 2015