TORONTO - Canadian Tire Corp (TSX:CTC) announced an increase in its quarterly dividend Thursday as the automotive, hardware and household goods retail chain reported an almost 36 per cent increase in third-quarter profits.
The earnings, $136.5 million or $1.67 per share, were up from $100.5 million or $1.23 per share in the same 2010 quarter and included the first contribution from newly acquired sporting goods retailer the Forzani Group Ltd.
Consolidated retail sales were up 16.3 per cent to $2.9 billion from $2.5 billion, while revenue was up 19 per cent to $2.7 billion from $2.3 billion. That included more than $218 million in sales contributed since mid-August by the Forzani acquisition.
Even excluding Forzani, Canadian Tires said consolidated retail sales and revenue remained strong, up 7.6 per cent and 11 per cent respectively.
"I'm pleased with the positive results in the quarter," president and CEO Stephen Wetmore said in remarks accompanying the results.
"Customers responded to our offerings, we managed our expenses effectively and continued to execute our strategies. The transition at FGL Sports is progressing very well and is meeting our expectations — both in top line sales and realizing synergies."
Meanwhile, the company said it was increasing its quarterly dividend to 30 cents from 27.5 cents on each common and class A non-voting share.
Canadian Tire shares were up 65 cents, or just under one per cent, at $69.55 in morning trading Thursday on the Toronto Stock Exchange.
Reporting on a segmented basis, CTR stores sales increase 3.2 per cent, while same-store sales, an important metric for retailers, were up 2.3 per cent, driven by sales increases across all key categories.
Canadian Tire Gas saw a 27.4 per cent increase in sales as a result of a significant boost in fuel prices and a 4.5 per cent increase in volume.
Sales at clothing store Mark's increase 2.8 per cent (2.7 per cent same store), while FGL enjoyed a 6.6 per cent increase in overall sales and an even stronger 7.3 per cent growth in same-store sales.
Canadian Tire Financial Services revenue increase 0.5 per cent to $242.1 million from $241.9 million despite the corporation's decision to switch revenue from auto club services to retail. Excluding that change, CTFS revenue was up 2.7 per cent, primarily due to higher interest income on credit card receivables.
Canadian Tire is one of Canada's leading retailers and the country's largest sporting goods retailer, with more than 1,700 retail and gasoline outlets from coast-to-coast.