canadian tire
Toronto symbol CTC.A, operates stores that sell automotive, household and sporting goods. It also operates PartSource auto parts stores, Mark’s Work Wearhouse casual clothing stores and gas stations.
CANADIAN TIRE CORP., LTD. $69 (Toronto symbol CTR.NV; SI Rating: Above average) is best known for its 459 Canadian Tire retail stores, which carry a unique mix of automotive, home improvement and sporting goods. The company also sells its goods over the Internet. Other operations include Canada’s largest independent chain of gasoline stations, consisting of 253 gas bars, 242 convenience stores and kiosks and 65 car washes, plus the Mark’s Work Wearhouse chain of 335 casual clothing stores. In 1994, Canadian Tire began replacing its traditional stores with “New-Format” stores, which are bigger and better lit. The company later refined this design into the “Concept 20/20" store, whose more flexible layout lets stores carry more fast-selling merchandise. Concept 20/20 stores also feature other innovations, such as a central customer service counter and improved signage....
When Wal-Mart and other big American retailers began moving into Canada in the 1990s, many Canadians assumed the worst for Canadian retail stocks. In the fall of 2000, in fact, some investors zeroed in on Canadian Tire as a tax-loss selling candidate. They dumped the stock at barely a quarter of current prices. We stuck with Canadian Tire and advised buying more, because we had a high opinion of the steps it was taking to counter this threat. Canadian Tire has since held on to its market share, and enjoyed huge gains in its profits and stock price. The company is still coming up with innovative ways to grow and keep costs down. We still see it as a top choice for conservative investors....
CANADIAN TIRE CORP. $68 (Toronto symbol CTR.NV; SI Rating: Above average) has agreed to sell and lease back two distribution centres in Ontario and Alberta. The deal will generate a $50 million pre-tax gain, which the company will spread over the 21-year term of the lease. To put that in context, the company earned $1.02 a share (total $83.3 million) before unusual items in the third quarter of 2005, up 25.9% from $0.81 a share ($66.2 million) a year earlier. Revenue grew 11.8%, to $1.9 billion from $1.7 billion. Same-store sales at its main Canadian Tire chain rose 2.2%, while same-store sales at Mark’s Work Wearhouse rose 13.9%. Profits at the company’s financial services division rose 11.1% in the quarter, mainly due to expanding use of its Canadian Tire MasterCard. The company keeps its credit risk down by selling some of its credit card receivables to third parties, usually for a gain. Sales of real estate and receivables provide more capital to invest in its business, where returns are likely to be higher....