Retail store news :FGL Sports Third Quarter Comps Up 4.4 Percent

Canadian Tire reported that retail sales at its FGL Sports, formerly Forzani Group, increased 4.2 percent in the third quarter. Same store sales at FGL Sports increased 4.4 percent over the comparable period in the prior year due to strong sales in apparel, equipment and footwear.


Overall, Canadian Tire's consolidated sales were up 8.0 percent and consolidated revenue increased 4.6 percent to approximately $2.8 billion in the quarter as a result of the inclusion of FGL Sports revenue for 13 weeks compared to six weeks in Q3 2011 and revenue growth at Mark's, Petroleum and Financial Services.

Consolidated net income declined 3.7 percent compared to the prior year.  Included in net income in the third quarter of 2011 were net benefits related to the acquisition of FGL Sports, reduced income tax expense and interest income received related to resolution of tax matters.  Excluding these items, net income increased 3.5 percent in Q3 2012.

"Overall, the business performed well in the quarter. The quality of our earnings reflects the strength of our core categories and efforts to manage the sales and margin mix," said Stephen Wetmore, President and CEO, Canadian Tire Corporation. "While revenue declined due to slower shipments of winter products to our dealer network, I am pleased with the performance of Canadian Tire Retail and our progress on key initiatives. We also continued to realize expected synergies at FGL Sports and advanced our growth strategy and banner rationalization efforts."

Retail
Retail sales at Canadian Tire Retail (CTR) increased 0.3 percent and same store sales declined by 0.2 percent in the quarter. Canadian Tire saw strong growth in key categories such as backyard living, outdoor recreation and kitchen as a result of increased marketing efforts and new assortments. The increase was partially offset by decreases in categories that were de-emphasized such as electronics, home décor and household cleaning. Continued softness in the automotive market contributed to a decline in auto service and related parts sales in the quarter.

FGL Sports' retail sales increased 4.2 percent and same store sales increased 4.4 percent over the comparable period in the prior year due to strong sales in apparel, equipment and footwear. As well, the business has moved quickly to reduce the number of non-strategic banners as announced in its recent growth strategy.

At Mark's, retail sales grew 2.0 percent and same store sales increased 1.7 percent due to growth in women's wear and industrial footwear sales, particularly in Western Canada.  Sales gains were modest in the quarter due to less promotional activity in July and August, and slower sales of fall seasonal items in September due to the extended warm weather across the country.

Petroleum retail sales increased 2.4 percent primarily due to strong convenience store sales and increased gas volume.

Revenue in the retail segment increased 4.9 percent in the quarter primarily due to the inclusion of FGL Sports for 13 weeks compared to six weeks in Q3 2011, increases in Petroleum and Mark's, partly offset by a decrease in CTR revenue across all categories.

Retail segment income before income taxes of $105.6 million was flat compared to the prior year. The third quarter of 2012 included FGL Sports results for 13 weeks compared to six weeks in Q3 2011 and reflected revenue growth at Mark's and Petroleum, which were offset by revenue declines at CTR.

Financial Services
Financial Services was a strong contributor to the Company's earnings in the third quarter. Financial Services' revenue increased 2.0 percent in the quarter and income before income taxes increased 14.8 percent in the quarter compared to the prior year. The earnings increase was due to increased revenue related to credit card receivables growth, improved portfolio aging and write-off performance, and lower operating expenses compared to the prior year.

Capital Expenditures
Capital expenditures in the third quarter were $68.1 million compared to $120.2 million in the prior year. The decrease was largely due to reduced spending on projects such as Automotive Infrastructure, which was substantially completed prior to 2012, and the timing of real estate expenses compared to last year.

Quarterly Dividend
Canadian Tire Corporation has declared a 16.7 percent increase in the quarterly dividend, to 35 cents per share, on each Common and Class A Non-Voting share. The dividend is payable March 1, 2013 to Common and Class A shareholders of record as of January 31, 2013. The dividend is considered an "eligible dividend" for tax purposes.

Dividends declared on Common and Class A Non-Voting shares in the third quarter of 2012 of $0.30 per share are payable on December 1, 2012, to shareholders of record as of October 31, 2012.

( SportsOneSource Media )