Canadian Tire Focuses on its Business

Article Excerpt

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…

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