Canadian Tire sales soar amid bitter winter weather
Company reports 17% increase in Q4 profits as same-store sales jump 4%
The bitter winter weather that ate into results for most retailers was a benefit to Canadian Tire Corp., which saw fourth quarter sales rise four per cent at its Canadian Tire stores.
Consumers were buying outdoor tools, automotive and outdoor recreation products in the October to December period. That would include the ice chippers, generators and ice-melting materials bought during the ice storm as well as the snow tires and toboggans purchased to get Canadians through an unusually severe winter.
"We were not only prepared in our stores but we also had the right assortment, proving that... we understand the need of Canadians and are always prepared for everyday life of Canada," said Canadian Tire chief executive Stephen Wetmore in a conference call following the release of the company's latest results.
The company’s net income was up 17 per cent to $191 million, or $2.32 per share, in the fourth quarter compared to $162.8 million, or $1.99 per share, a year earlier.
Consolidated retail sales in the fourth quarter increased 5.5 per cent to $4 billion, and consolidated revenue increased 5.1 per cent to $3.3 billion over the same period last year.
Income up 13%
Canadian Tire had a very strong year, said Wetmore.
"The ongoing transformation of our company is resulting in significant momentum and record results for our businesses," Wetmore said in a news release on Thursday.
For the full year, Canadian Tire had net income of $564.4 million, up 13.1 per cent from 2012 earnings of $498.9 million.
Revenue increased 3.1 per cent to $11.8 billion, largely a result of higher shipments to Canadian Tire stores and increased sales across all retail banners.
New president Michael Medline said weather helped the retailer's sales but also credited the company's marketing campaigns and promotional events.
"It's fair to say that about half of Canadian Tire's performance is directly attributable to favourable weather, although I doubt many of our customers would describe this winter as favourable. But good results related to weather isn't just related to dumb luck," said Medline.
He said the company plans to keep expanding the square footage of its Sport Chek stores.
This was also the first quarter that Canadian Tire's real estate spin-off reported results. The company holds an 83.1 per cent effective interest in CT Real Estate Investment Trust, which acquired a majority of the company's real estate. CT REIT's initial public offering last fall raised $303 million.
The REIT reported net income of $31 million for the period and property revenue of $63 million between July 15 to Dec. 31, 2013.