CTC.A Canadian Tire Corp

• Consolidated retail sales up 14.9%
• Consolidated revenue up 16.4%
• Diluted earnings per share up 26.4%

TORONTO, Aug. 9, 2012 /CNW/ - Canadian Tire Corporation, Limited (TSX:CTC) (TSX:CTC.a) today released second quarter results for the period ended June 30, 2012, which reflected strong revenue and earnings growth compared to the second quarter of 2011.

Consolidated revenue increased 16.4% to approximately $3 billion as a result of the inclusion of FGL Sports revenue of $335.2 million, solid sales growth across all retail businesses, and growth in Financial Services' segment revenue. Consolidated net income increased 26.4% to $133.7 million compared to the same period in 2011 and diluted earnings per share increased 26.4% to $1.63 for the quarter. Net income included $22.7 million of pre-tax costs associated with the FGL Sports banner rationalization plan announced in the second quarter.

"Overall, we had a very strong quarter with solid revenue momentum and improved margin performance in the Retail segment," said Stephen Wetmore, President and CEO, Canadian Tire Corporation. "We continue to focus on execution and are well positioned for the increasingly competitive operating environment we expect in the second half of the year."

Retail

Retail sales and same store sales at Canadian Tire Retail were up in the quarter with 1.0% and 0.4% increases respectively reflecting strong sales in key seasonal categories and continued growth in the Living, Fixing and Playing categories. Automotive experienced strong sales in key seasonal categories such as car care and maintenance products; however, auto service and related parts sales declined in the quarter compared to the same period in 2011.

At Mark's, retail sales increased 6.1% and same store sales increased 4.2% driven by growth in all merchandising categories led by industrial apparel and accessories sales, which were particularly strong in Western Canada. Men's and women's seasonal apparel categories saw significant growth, which was focused in its warm weather categories.

FGL Sports' retail sales increased 4.2% in the quarter over the comparable period in the prior year. FGL Sports' saw a 4.8% same store sales increase in the period due to strong sales in spring footwear and apparel, led by branded athletic clothing, and solid hard goods category sales including golf and equipment for team sports.

Revenue in the retail segment increased 17.8% in the quarter primarily due to the inclusion of FGL Sports and solid growth in all other retail banners.

Retail segment income before income taxes increased 17.3% to $115.3 million compared to the prior year as a result of sales growth across all banners, margin rate improvements and the inclusion of FGL Sports. Retail segment income before taxes included $22.7 million of costs associated with the FGL Sports banner rationalization plan.

Financial Services

Financial Services' was a strong contributor to the Company's earnings in the second quarter. Financial Services' income before income taxes increased 41.6% in the quarter compared to the prior year. Strong growth in income before taxes reflects higher revenues earned on credit card receivables, lower loan loss expenses and tight control of operating expenses.

Capital Expenditures

Capital expenditures for the second quarter were $68.8 million compared to prior year spending of $58.9 million, reflecting the inclusion of FGL Sports capital expenditures.

Quarterly Dividend

Canadian Tire Corporation has declared a quarterly dividend of 30 cents per share on each Common and Class A Non-Voting share. The dividend is payable December 1, 2012 to Common and Class A shareholders of record as of October 31, 2012. The dividend is considered an "eligible dividend" for tax purposes.

Please refer to Management's Discussion and Analysis for further detail and information on the following charts.

To view a PDF version of Canadian Tire Corporation's full quarterly earnings report please see: http://files.newswire.ca/116/Q22012IntrmRprtCTC.pdf

FORWARD-LOOKING STATEMENTS

This document contains forward-looking information that reflects management's current expectations related to matters such as future financial performance and operating results of the Company. Forward-looking statements are provided for the purposes of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our financial position, results of operation and operating environment. Readers are cautioned that such information may not be appropriate for other circumstances.

All statements other than statements of historical facts included in this document may constitute forward-looking information, including but not limited to, statements concerning management's expectations relating to possible or assumed future prospects and results, our strategic goals and priorities, our actions and the results of those actions and the economic and business outlook for us. Often but not always, forward-looking information can be identified by the use of forward-looking terminology such as "may", "will", "expect", "believe", "estimate", "plan", "could", "should", "would", "outlook", "forecast", "anticipate", "foresee", "continue" or the negative of these terms or variations of them or similar terminology. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable at the date that such statements are made.

By its very nature, forward-looking information requires us to make assumptions and is subject to inherent risks and uncertainties, which give rise to the possibility that the Company's assumptions may not be correct and that the Company's expectations and plans will not be achieved. Although the Company believes that the forward-looking information in this document is based on information and assumptions which are current, reasonable and complete, this information is necessarily subject to a number of factors that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking information for a variety of reasons. Some of the factors - many of which are beyond our control and the effects of which can be difficult to predict - include (a) credit, market, currency, operational, liquidity and funding risks, including changes in economic conditions, interest rates or tax rates; (b) the ability of Canadian Tire to attract and retain quality employees, Dealers, Canadian Tire Petroleum agents and PartSource, Mark's Work Wearhouse and FGL Sports store operators and franchisees, as well as our financial arrangements with such parties; (c) the growth of certain business categories and market segments and the willingness of customers to shop at our stores or acquire our financial products and services; (d) our margins and sales and those of our competitors; (e) risks and uncertainties relating to information management, technology, supply chain, product safety, changes in law, regulation, competition, seasonality, commodity price and business disruption, our relationships with suppliers and manufacturers, changes to existing accounting pronouncements, the risk of damage to the reputation of brands promoted by Canadian Tire and the cost of store network expansion and retrofits and (f) our capital structure, funding strategy, cost management programs and share price. We caution that the foregoing list of important factors and assumptions is not exhaustive and other factors could also adversely affect our results. Investors and other readers are urged to consider the foregoing risks, uncertainties, factors and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such forward-looking information.

For more information on the risks, uncertainties and assumptions that could cause the Company's actual results to differ from current expectations, please refer to the "Risk Factors" section of our Annual Information Form for fiscal 2011 and our 2011 Management's Discussion and Analysis, as well as Canadian Tire's other public filings, available at www.sedar.com and at www.corp.canadiantire.ca.

Statements that include forward-looking information do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made have on the Company's business. For example, they do not include the effect of any dispositions, acquisitions, asset write-downs or other charges announced or occurring after such statements are made.

The forward-looking statements and information contained herein are based on certain factors and assumptions as of the date hereof. The Company does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, unless required by applicable securities laws.

CONFERENCE CALL

Canadian Tire will conduct a conference call to discuss information included in this news release and related matters at 4:30 p.m. ET on August 9, 2012. The conference call will be available simultaneously and in its entirety to all interested investors and the news media through a webcast at http://investors.canadiantire.ca, and will be available through replay at this website for 12 months.

ABOUT CANADIAN TIRE

Canadian Tire Corporation, Limited (TSX:CTC, TSX:CTC.a) is one of Canada's most-shopped general retailers and the country's largest sporting goods retailer, with more than 1,700 retail and gasoline outlets from coast-to-coast. Our primary retail business categories - Automotive, Living, Fixing, Sports, Playing and Apparel - are supported and strengthened by our Financial Services division, which offers such products and services as Canadian Tire home services, credit cards, retail deposits, in-store financing, product warranties, and insurance. Nearly 68,000 people are employed across the Canadian Tire enterprise, which was founded in 1922 and remains one of Canada's most recognized and trusted brands.

SOURCE CANADIAN TIRE CORPORATION, LIMITED

PDF available at: http://stream1.newswire.ca/media/2012/08/09/20120809_C5910_DOC_EN_16757.pdf