CTC.A Canadian Tire Corp

• Strong sales and revenue growth
• Consolidated revenue up 23.4%
• Diluted earnings per share up 21.6%

TORONTO, May 10, 2012 /CNW/ - Canadian Tire Corporation, Limited (TSX:CTC) (TSX:CTC.a) today released first quarter results for the period ended March 31, 2012, which reflected strong revenue and earnings growth compared to the first quarter of 2011.

Consolidated revenue increased 23.4% to $2.4 billion in the quarter, reflecting the inclusion of FGL Sports acquired in August 2011, and solid growth across the retail businesses including all major categories within Canadian Tire Retail. Consolidated net income increased 21.5% to $71.0 million compared to the same period in 2011 and diluted earnings per share increased 21.6% to $0.87 for the quarter. Consolidated results reflected strong growth in Financial Services, the inclusion of FGL Sports and a lower tax rate.

"We had a very good first quarter driven by strong retail sales growth from all banners, including our most recent addition, FGL Sports, and strong performance by Financial Services," said Stephen Wetmore, President and CEO, Canadian Tire Corporation.

RETAIL

Consolidated retail sales rose 22.7% to $2.4 billion compared to the same period last year both as a result of the inclusion of FGL Sports and sales growth at all retail banners.

Retail sales at CTR increased 3.8% and same store sales were up 3.3% compared to the same period last year. Favourable weather in March drove strong sales in backyard living, cycling and gardening while promotional activity throughout the quarter supported growth in kitchen and household cleaning. The Automotive category continued to perform well this quarter with sales growth in auto maintenance, car care, and tires.

Canadian Tire Petroleum retail sales increased 5.2% compared to the prior year, driven by a rise in fuel prices and additional sites related to the 400 series highway initiative.

Mark's delivered strong growth this quarter as retail sales increased 7.1% and same store sales were up 5.8% over the prior year. The majority of the increase came from sales growth in the industrial apparel and footwear categories, particularly in the Prairie provinces and Quebec.

FGL Sports had a strong start to the year with retail sales growth of 5.6% and same store sales growth of 7.0% versus the comparable period in 2011. FGL Sports was well positioned for the early onset of spring and saw sales growth in hard goods, apparel and footwear.

Revenue in the retail segment increased 26.5% to $2.2 billion in the first quarter compared to the same period in 2011. Excluding FGL Sports revenue of $341.8 million, retail revenue increased 6.7% driven by growth across all banners. Income before taxes was down by $7.1 million versus 2011. Revenue increases were offset by higher sales of lower margin products, discounting of seasonal merchandise and planned first quarter operating expense growth.

FINANCIAL SERVICES

Financial Services continued to be a strong contributor to the Company's earnings in the first quarter. Revenue increased 2.6% to $241.7 million versus the prior year due to higher interest income and fees related to credit card receivables.

Financial Services income before taxes increased 43.8% to $73.0 million due to increased revenue, a reduction in impairment loss on loans receivable as a result of better aging and the continued management of operating expenses.

CAPITAL EXPENDITURES

Capital expenditures for the first quarter were $64.1 million compared to prior year spending of $53.7 million, primarily 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 September 1, 2012 to Common and Class A shareholders of record as of July 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/Interim_Report_CTC.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, 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 May 10, 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://corp.canadiantire.ca/EN/investors, 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/2012/05/10/20120510_C6188_DOC_EN_13527.pdf