Sunday, March 29th5.3°C
25490
24921

Canadian Tire open to U.S. acquisitions for growth, names new CEO

TORONTO - Canadian Tire Corp. (TSX:CTC.A) says it's open to looking south of the border for acquisitions, under certain conditions.

"It doesn't make sense for us to wander away and do things that we're not very good at," chief executive Stephen Wetmore told analysts during a call Thursday.

"We're choosy. We'll prepare for it, and if we're going to execute on anything, it will be extremely well-executed with a high success factor. I'll look anywhere (for acquisitions) but it's a matter of us fitting in."

Any acquisition would most likely be in the retailer's key categories, such as sports and automotive, he added.

The Toronto-based company is in the midst of a three-year strategic plan aimed at rebranding itself as more than just a general merchandiser known for its array of products in the household, outdoor and auto sectors.

Wetmore said efforts so far have been successful, as evidence from its latest quarter where sales rose despite a late start to the spring season. Spring is a key time for retailers who look for increased spending by consumers preparing for summer activities, vacations and home renovations.

"Our efforts are paying off by shifting our focus to thinking more like a group of speciality retailers and less like general merchant," said Wetmore.

Canadian Tire reported Thursday that its profits grew to $178.9 million for the three month-period ended June 29. This compared with $154.9 million in the comparable quarter a year earlier.

On a per share basis, the results were equivalent to $2.12 compared to $1.91 in the same period last year.

Revenue increased to $3.17 billion from $3.02 billion helped by sales at FGL Sports, the subsidiary that operates the Sport Chek and recently-acquired Pro Hockey Life stores.

For the quarter, same-store sales at Sport Chek increased 10.8 per cent, while the same key measurement of retail performance at Mark's stores was up 3.2 per cent. Canadian Tire saw same-store sales growth of 2.8 per cent.

Meanwhile, the company, which also owns clothing retailer Mark's, announced that Canadian Tire president Michael Medline will take over as CEO when Wetmore leaves on Dec. 1. Wetmore will remain on Canadian Tire's board in a non-executive role of deputy chairman, a position that will be created for him.

The move was largely anticipated by investors.

Medline told analysts he will continue have Canadian Tire remain "on the offence" amid stiff competition from U.S. retail rivals such as Walmart and Target and make full use of digital technology to set itself apart.

"This is going to be a big change to face our industry and a challenge. We're figuring it out and it's working for us. It's going to be a strategic advantage to us going forward," said Medline.

Some of these initiatives include better use of customer analytics, phasing out paper flyers at Sport Chek and Mark's, and expanding its loyalty programs.

"The industry is moving fast. This is not the sleepy retail industry decades ago," he said. "This is a very exciting place to do business. But, like with everything, winner takes all. We need to be very fast and very successful."

The retailer said it will provide more details on its strategic plan during an investor day event Oct. 9.

Irene Nattel, an analyst with RBC Dominion Securities, said the company has made it clear that it was able to withstand volatile winter and spring weather conditions through a number of "deliberate actions."

Founded in 1922, Canadian Tire has nearly 1,700 retail and gasoline outlets across the country, including various banners under FGL Sports, such as Hockey Experts, Sports Experts, National Sports, Intersport and Atmosphere.

The company also holds a majority interest in CT Real Estate Investment Trust (TSX:CRT.UN), which acquired most of the company's real estate last year, and operates a financial services division which includes credit cards.

Follow @LindaNguyenTO on Twitter.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14812.42-57.38
S&P CDNX681.43+1.87
DJIA17712.66+34.43
Nasdaq4891.22+27.86
S&P 5002061.02+4.87
CDN Dollar0.7928-0.0082
Gold1196.30-8.80
Oil48.43-3.00
Lumber282.40-3.60
Natural Gas2.62-0.05

 
Okanagan Companies
Pacific Safety0.125-0.005
Knighthawk0.010.00
QHR Technologies Inc1.50+0.00
Cantex0.03-0.01
Anavex Life Sciences0.219+0.009
Metalex Ventures0.04-0.01
Russel Metals24.50-0.18
Copper Mountain Mining1.13+0.00
Colorado Resources0.125+0.010
ReliaBrand Inc0.006-0.001
Sunrise Resources Ltd0.045+0.000
Mission Ready Services0.255+0.020
Decisive Dividend Corporation1.80+0.02

 





FEATURED Property
2231971204 - 1610 Gordon Drive
2 bedrooms 2 baths
$149,700
more details
image2image2image2
Click here to feature your property
Please wait... loading


CRA Notice of Assessment

Many Canadians rush to file their taxes on time each year and don’t think about it until the next year. One of the most overlooked notices received from the CRA annually is the annual Notice of ...


Medical confidential?

If ICBC asks your doctor for your information you may wonder: Can ICBC ask my doctor for my medical information? Can ICBC request a medical report from my doctor without my consent? What is ICBC entit...


Stay out of sales limbo!

Have you ever had a series of good meetings with a prospect … gathered all kinds of information … and given what you thought was a great presentation … only to receive a response ...

_





25482


Member of BC Press Council


25342