Strong winter products sales drive Canadian Tire profit

Reuters
Customers arrive at the Canadian Tire store in North Vancouver, British Columbia February 10, 2011. REUTERS/Andy Clark

(Reuters) - Canadian Tire Corp , best known for its automotive and homeware stores, posted a better-than-expected profit for the fifth straight quarter as harsh winter weather boosted sales of shovels, snow blowers and car batteries and tires. The company's revenue rose 5 percent in the fourth quarter ended December 28 due to robust same-store sales across brands. "It's fair to say that about half of Canadian Tire's performance is directly attributable to favorable weather," President Michael Medline said on a conference call, but he added that the good results weren't "just dumb luck." Sales of Canadian retailers such as Dollarama Inc were hit by storms that caused power failures, store closures and disruption to travel in December. Canadian Tire said net income attributable to the company's owners rose 15 percent to C$187.8 million ($171 million), or C$2.32 per share, in the fourth quarter ended from C$162.8 million, or C$1.99 per share, a year earlier. Excluding one-time items, the company earned C$2.35 per share, above the average analyst estimate of C$2.23 per share, according to Thomson Reuters I/B/E/S. Consolidated retail sales increased 5.5 percent to C$3.98 billion in the quarter, helped by strong demand for casual clothing, sports footwear, outdoor tools and automotive accessories. Same-store sales at the company's Canadian Tire outlets rose 4 percent in the quarter. Same-store sales at FGL Sports, formerly Forzani Group Ltd that was acquired by Canadian Tire in 2011, rose 12.5 percent. FGL operates the Sport Chek, Sports Experts and Atmosphere chains. Canadian Tire is one of the sponsors of the Canadian team participating in the Sochi Winter Olympics. The company's shares rose as much as 3.5 percent to C$98.03 on Thursday on the Toronto Stock Exchange. The stock has risen about 38 percent in the 12 months to Wednesday's close, hitting its life high of C$101.05 in November. In the period, the TSX-Toronto Stock Exchange 300 Composite Index <.GSPTSE> has gained about 9 percent. Canadian Tire shares were up 3 percent at C$97.89 on Thursday afternoon. ($1 = 1.0988 Canadian dollars) (Reporting by Ashutosh Pandey and Sneha Banerjee in Bangalore; Editing by Kirti Pandey)