Canadian Tire financial arm hits some potholes
TORONTO — Canadian Tire’s retail and real estate segments fared well during the second quarter despite challenging conditions, but the company’s financial services division hit a couple of potholes along the way.
The Toronto-based company (TSX:CTC.A) said margins at its financial services were squeezed as it invested to acquire new accounts through traditional marketing and in-store financing programs at Canadian Tire’s retail locations. It also experienced slightly higher rates of past-due credit card receivables and writeoffs.
In the main retail segment, same-store sales — those at outlets open for more than a year — were up in all of its core banners. Those includes the Canadian Tire stores and gas bars, Sport Chek and other sporting goods banners and Mark’s clothing stores.
The national chain had overall net income of $199 million or $2.46 per share, up from $186.2 million or $2.15 per share in the second quarter of 2015.
Its retail segment’s revenue grew three per cent or $89.1 million to $3.04 billion — accounting for the vast majority of Canadian Tire’s total revenue of $3.98 billion, which was up from $3.86 billion in last year’s second quarter.
Canadian Tire’s real estate arm increased its revenue by 8.9 per cent to $101.5 million and income before taxes jumped by 5.5 per cent to $60.3 million.
Revenue from Canadian Tire’s financial services segment — including its credit card operations— crawled forward by 0.4 per cent or $1.1 million to $277.8 million and pre-tax profit fell 7.9 per cent to $90.1 million from $97.7 million.
By The Canadian Press