Canadian Tire boosts dividend 16.7%
A Canadian Tire store is seen in North Vancouver, on May 10, 2012. THE CANADIAN PRESS/Jonathan Hayward
TORONTO - Canadian Tire Corp. Ltd. (TSX:CTC.A) is boosting its dividend almost 17 per cent even as the general merchandise, sporting goods and automotive parts and services retailer reported a dip in third-quarter profits.
The new quarterly dividend — up five cents to 35 cents per share — is payable March 1, 2013, to shareholders of record as of Jan. 1.
Based on the company's mid-morning share price on the Toronto Stock Exchange of $70.74, down 42 cents, that would produce a yield of 1.98 per cent.
Canadian tire said Thursday that net earnings in the three months ended Sept. 29 were $131.4 million or $1.61 per diluted share, down from $1.67 per diluted share in the comparable year-earlier period.
Consolidated sales were up eight per cent at $3.17 billion from $2.94 billion, while consolidated revenue increased 4.6 per cent to $2.83 billion from $2.7 billion.
The company credits the inclusion of FGL Sports revenue for 13 weeks compared to six weeks in Q3 2011 as well as revenue growth at its Mark's clothing outlets and higher petroleum sales and financial services revenue.
However, consolidated net income declined 3.7 per cent 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 would have increased 3.5 per cent in the most recent period.
"Overall, the business performed well in the quarter," president and CEO Stephen Wetmore said in remarks accompanying the earnings report.
Wetmore has said in the past that Canadian Tire was positioning itself for an expected difficult final half as it faced liquidations and closures from competitors, in particular Zellers.
The retailer also said it expected to face pressure from other companies that are expanding, including Walmart.
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 employing some 68,000 people.
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