Canadian Tire Corporation Reports Continued Momentum in First Quarter Results

• Consolidated same store sales up 5.2% in the first quarter:
• Canadian Tire up 5.8%; Mark's up 3.4%; FGL up 3.9%
• Financial Services GAAR growth up 9.4%, revenue up 8.6%
• Retail gross margin rate, excluding Petroleum, increased 74 bps
• Financial services segment contributed $97.1 million and 73.7% of consolidated IBT
• Diluted earnings per share (EPS) was $1.18, down 5.3%, including a one-time accelerated depreciation expense of $0.19 per share in the quarter

TORONTO, May 10, 2018 /CNW/ - Canadian Tire Corporation, Limited (TSX:CTC, TSX:CTC.A) today released first quarter results for the period ended March 31, 2018.

"I am pleased with the continued momentum in the topline and margin performance of our retail businesses. The first quarter is traditionally our smallest and we delivered results on plan as we invest in key initiatives for long-term growth," said Stephen Wetmore, President and CEO, Canadian Tire Corporation. "For more than a year, we have been aligning our banners, assets and capabilities to operate as One Company to serve the needs of a common customer and prepare them for the Jobs and Joys of Life in Canada. Last month, through exceptional collaboration, we successfully launched Triangle Rewards™, the evolution of our loyalty and credit card program. This exciting new program is an important step in uniting our banners and rewarding our customers for shopping across our family of companies, now and in the future."

"Finally, as a proud Canadian company, we were delighted to support our Paralympic and Olympic athletes as they competed in the PyeongChang 2018 Olympic Winter Games," Wetmore added.

CTC announced today that it has entered into an agreement to purchase the company, controlled by the Ontario Teachers' Pension Plan, which owns and operates the Helly Hansen brands and related businesses.

CONSOLIDATED OVERVIEW

• Consolidated retail sales increased $164.4 million or 6.4% in the first quarter. Excluding Petroleum, consolidated retail sales were up 5.1% over the same period last year.
• Consolidated revenue increased $93.5 million, or 3.4%, which includes a $51.1 million increase in Petroleum revenue resulting from higher per litre gas prices. Excluding Petroleum, consolidated revenue increased $42.4 million, or 1.8% in the quarter.
• Diluted EPS was $1.18 in the quarter, a decrease of $0.06 per share, or 5.3%, including a one-time accelerated depreciation expense of $0.19 per share in the quarter.

RETAIL OVERVIEW

• The following financial results reflect Q1 2018 performance compared to Q1 2017.
• Retail segment revenue increased 2.8%. Excluding Petroleum, retail segment revenue increased 0.8%.
• Retail margin rate excluding Petroleum increased 74 bps.
• Income before income taxes decreased $21.4 million, or 48.1%.
• Canadian Tire saw retail sales increase 6.0% and same store sales were up 5.8%.
• FGL's retail sales increased 2.5% and same store sales increased 3.9%.
• Mark's retail sales grew 3.6% and same store sales increased 3.4%.

CT REIT OVERVIEW

• As disclosed in the Q1 2018 CT REIT earnings release on May 8, 2018, CT REIT announced four new investments, totalling $35 million.

FINANCIAL SERVICES OVERVIEW

• In Q1 2018, gross average credit card receivables (GAAR) was up 9.4% over the prior year.
• Income before income taxes decreased 0.6% in the first quarter to $97.1 million.

CAPITAL EXPENDITURES

• Operating capital expenditures were $45.4 million in the first quarter, down from $68.1 million in the first quarter of 2017.

QUARTERLY DIVIDEND

• The Company has declared dividends payable to holders of Class A Non-Voting Shares and Common Shares at a rate of $0.90 per share payable on September 1, 2018 to shareholders of record as of July 31, 2018. The dividend is considered an "eligible dividend" for tax purposes.

SHARE REPURCHASE

• On November 9, 2017, the Company announced its intention to repurchase $550 million of its Class A Non-Voting Shares, in excess of the amount required for anti-dilutive purposes, by the end of fiscal 2018. As at March 31, 2018, $216 million of such shares had been repurchased under this intention.

NORMAL COURSE ISSUER BID

• On February 20, 2018, the Toronto Stock Exchange accepted the Company's notice of intention to make a normal course issuer bid to purchase up to 5.9 million Class A Non-Voting Shares between March 2, 2018 and March 1, 2019.

To view a PDF version of Canadian Tire Corporation's full quarterly earnings report please see: http://files.newswire.ca/116/CTC_Q1_2018_EN.pdf

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking information that reflects management's current expectations related to matters such as future financial performance and operating results of the Company. Forward-looking statements are provided for the purposes of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our anticipated financial position, results of operations and operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

Certain statements other than statements of historical facts included in this press release may constitute forward-looking information, including but not limited to, statements concerning the Company's intention to repurchase Class A Non-Voting Shares in excess of the amount required for anti-dilutive purposes by the end of 2018 under the heading "Share Repurchase".

By its very nature, forward-looking information requires us to make assumptions and is subject to inherent risks and uncertainties, which give rise to the possibility that the Company's assumptions, estimates, analyses, beliefs and opinions may not be correct and that the Company's expectations and plans will not be achieved. Although the Company believes that the forward-looking information in this press release is based on information, assumptions and beliefs which are current, reasonable and complete, this information is necessarily subject to a number of factors, risks and uncertainties that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking information.

For more information on the risks, uncertainties and assumptions that could cause the Company's actual results to differ from current expectations, refer to section 2.11 (Risk Factors) of our Annual Information Form for fiscal 2017 and to sections 7.2.4 (Retail segment business risks), 7.3.2 (CT REIT segment business risks), 7.4.3 (Financial Services segment business risks) and 12.0 (Enterprise risk management) and all subsections thereunder of our  Management's Discussion and Analysis for the year ended December 30, 2017, as well as the Company's other public filings, available at www.sedar.com and at https://investors.canadiantire.ca.

The forward-looking statements and information contained herein are based on certain factors and assumptions as of the date hereof and do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made have on the Company's business. The Company does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, except as is required by applicable securities laws.

CONFERENCE CALL

Canadian Tire will conduct a conference call to discuss information included in this news release and related matters at 8:30 a.m. ET on May 10, 2018. The conference call will be available simultaneously and in its entirety to all interested investors and the news media through a webcast at http://corp.canadiantire.ca/EN/investors, and will be available through replay at this website for 12 months.

ABOUT CANADIAN TIRE CORPORATION

Canadian Tire Corporation, Limited, (TSX:CTC.A) (TSX:CTC) or "CTC," is a family of businesses that includes a Retail segment, a Financial Services division and CT REIT. Our retail business is led by Canadian Tire, which was founded in 1922 and provides Canadians with products for life in Canada across its Living, Playing, Fixing, Automotive and Seasonal & Gardening divisions. PartSource and Gas+ are key parts of the Canadian Tire network. The Retail segment also includes Mark's, a leading source for casual and industrial wear; Pro Hockey Life, the world's largest hockey centric retailer; and FGL (Sport Chek, Hockey Experts, Sports Experts, National Sports, Intersport and Atmosphere), which offers the best active wear brands. The approximately 1,700 retail and gasoline outlets are supported and strengthened by our Financial Services division and the tens of thousands of people employed across the country by the Company and its local dealers, franchisees and petroleum retailers. For more information, visit Corp.CanadianTire.ca.

SOURCE CANADIAN TIRE CORPORATION, LIMITED