Canadian Tire profit, revenue up 20%

Canadian Tire is reporting more than 20 per cent increases in both revenue and profit for the first quarter on strong retail growth and the acquisition of sporting goods retailer the Forzani Group.

The retailer posted $2.4 billion in revenue for the quarter ended March 31, up 23 per cent from the same period last year, and a profit of $71 million, or 87 cents a share, up 21.5 per cent from the same period in 2011.

The average analyst estimate had been for a profit of 79 cents per share, according to Thomson Reuters.

The company said the results reflected strong growth in its financial services division, which includes its credit cards, the inclusion of Forzani and a lower tax rate.

Retail sales at Canadian Tire's namesake stores increased 3.8 per cent and same store sales were up 3.3 per cent compared to the same period last year.

Financial services revenue increased 2.6 per cent to $241.7 million due to higher interest income and fees related to credit cards.

Sales at Canadian Tire's gas bars increased 5.2 per cent year over year, driven by a rise in fuel prices and additional locations on Ontario's 400 series highways.

The Toronto-based retailer said Forzani had a strong start to the year with retail sales growth of 5.6 per cent and same store sales growth of seven per cent compared to the same period in 2011.

It's clothing chain Mark's saw retail sales increase 7.1 per cent and same store sales were up 5.8 per cent over the first quarter of 2011.

Canadian Tire owns the No. 1 and No. 2 sporting goods retail chains in the country after buying the Forzani Group Ltd. in a $771-million deal last year that included some 500 stores under various banners, including Sport Chek, Athletes World and Atmosphere.

Canadian Tire has more than 1,700 retail and gasoline outlets from coast-to-coast and more than 58,000 employees.