TORONTO – A combination of late winter weather and an underestimation on the flurry of Christmas shopping activity left Canadian Tire posting a small increase in fourth-quarter revenue and a nearly two-per cent drop in profits.
The Toronto-based retailer said Thursday that net income in the three months ended Dec. 29 was $163.1 million or $2 per diluted share.
That was down 1.9 per cent from $166.3 million or $2.03 per diluted share in the same 2011 period.
Revenue increased one per cent to $3.16 billion from $3.12 billion.
Chief executive Stephen Wetmore blamed the weak growth on a number of factors, which also included some of its competitors moving towards Boxing Day prices earlier than usual.
“The aggressiveness of discounting happened early (in the quarter), which obviously changed the annual pattern from what we’ve been used to a bit,” he said in a conference call.
Overall retail sales at corporate and franchise locations were up 1.4 per cent to $3.78 billion from just under $3.73 billion in the year-earlier period.
Canadian Tire, which like many Canadian retailers has been preparing for the entry of U.S. company Target this year, took restructuring charges of $19.6 million in the quarter as several executives left their roles as part of cost cuts.
The company is also looking at new ways to broaden its store concepts. It is preparing to extend its “store-within-a-store” concept, which already includes housing its Mark’s clothing stores, as well as open smaller “express” locations that span a much smaller 10,000 square footage in urban areas.
Canadian Tire sells general merchandise, clothing and sporting goods as well as financial services and automotive products and services.
For the full year the company, whose retail banners include Mark’s and a number of names operated through FGL Sports such as Sport Chek and Atmosphere, said net earnings were $$499.2 million or $6.10 per diluted share.
That was up 6.9 per cent from net earnings of $467 million or $5.71 per diluted share in the year-earlier period.
Annual revenue rose 10 per cent to $11.42 billion from $10.38 billion as the company reported the full-year impact of FGL results, compared with just 19 weeks in 2011.
Canadian Tire shares rose 69 cents to close at $68.91 on the Toronto Stock Exchange.