The big hardware and home goods retailer said its quarterly dividend payments would increase to 27.5 cents next year from 21 cents each quarter this year. The move comes after the company reported quarterly profits of $103.2 million, or $1.46 per share, when factoring in a restructuring charge of $14.7 million. That's an increase from $85.4 million, or $1.11 per share, in the same three-month period a year earlier, easily beating analyst forecasts.
"Overall, our business is performing well," said Stephen Wetmore, president and CEO of Canadian Tire, noting the company repaid $300 million in debt that matured in the third quarter of 2011.
Retail analyst Robert Cavallo says that the strong results will likely boost Canadian Tire's share price.
"Given the earnings and dividend increase, we could see the share price react fairly strongly," he said in a note.
Retail sales at Canadian Tire stores rose 2.5 per cent to $2.51 billion. At retail stores open more than a year, sales grew by 1.4 per cent. Sales at its Mark's Work Warehouse clothing division grew 4.5 per cent. Inclusion of Mark's Work Wearhouse outlets, more selection and improved customer service are part of the Canadian Tire's new "smart store" concept that is now being rolled out.
The company said it is on track to open three new smart stores, three smaller stores and complete 59 smart store conversions by early in 2011.
Canadian Tire has a workforce of 58,000 and operates 273 gas stations and 482 retail stores across the country.
from Western Investor, January 2011
