The Successful Investor Hotline – Friday, August 14, 2009

Article Excerpt

CANADIAN TIRE CORP., $59.20, Toronto symbol CTC.A, reported quarterly profits that were higher than the year-earlier period, despite lower sales. Cooler-than-normal weather in Ontario and Quebec hurt demand for seasonal goods, such as barbecues and patio furniture. But sales of home-improvement products, like paint, were stronger. In the three months ended July 4, 2009, the retailer’s earnings per share rose 8.6%, to $1.26 from $1.16 a year earlier. These figures exclude unusual items, like gains and losses on asset sales. On this basis, the latest earnings were much better than the $1.02 a share that analysts were expecting. The higher earnings were mainly the result of Canadian Tire’s new inventory-management systems, which improved the productivity of its stores. Revenue fell 5.1%, to $2.3 billion from $2.45 billion a year earlier. Same-store sales at its main retail division (which includes Canadian Tire stores and the PartSource auto-parts chain) fell 2.7%. As well, lower gasoline prices caused a 21.4% revenue drop at Canadian…