TORONTO (Reuters) - Two of Canada’s top retailers reported a jump in third-quarter results on Thursday as same-store sales climbed despite the effects of a global economic downturn.
The results could bode well for the big chain stores as they gear up for the holiday shopping season, a crucial time for the sector that pundits expect will be significantly slower than normal.
“The results were as good as or better than expected, which in this kind of market is good,” said John Kinsey, a portfolio manager at Caldwell Securities.
Canadian Tire Corp reported a 6 percent boost in profit as the country’s biggest household goods and auto parts retailer weathered the economic downturn with a 2 percent increase in same-store sales over last year.
Also on Thursday, Shoppers Drug Mart, Canada’s biggest pharmacy chain, posted a 14.8 percent jump in third-quarter profit as sales jumped almost 10 percent, bolstered by its pharmacy division. Closely watched same-store sales rose 5 percent, excluding tobacco products.
The impressive results came as a number of U.S. retailers posted their worst October sales data in this decade, with department stores and apparel retailers taking the hardest hit.
Canadian Tire said on Thursday it earned C$108.6 million ($92.7 million), or C$1.33 a share, up from C$102.5 million, or C$1.25 a share, in the same period last year.
Adjusted net earnings for the quarter, which excludes non-operating gains and losses, came in at C$1.42 a share.
Revenue was C$2.26 billion, up 10.2 percent from C$2.05 billion last year.
Analysts were expecting an average of C$1.30 before items and revenue of C$2.16 billion, according to Reuters Estimates.
Canadian Tire also confirmed its expectation that 2008 earnings per share would be between C$4.75 and $5.05, excluding non-operating items.
“While it is reasonable to expect that the current economic environment could affect consumer behavior, the quarter has started strongly for (the company), with strong sales and same store sales performance in October resulting from continued improvements in pricing and promotional activity,” Canadian Tire said in a release.
The company also said on Thursday it hired former BCE executive Stephen Wetmore as its new president, to replace Tom Gauld as president and chief executive. Gauld will retire from the position at the end of the year.
Canadian Tire shares were up 1.6 percent at C$46.04.
Shoppers results also rose to C$163 million, or 75 Canadian cents a share, from C$142 million, or 65 Canadian cents, in the same period a year earlier.
Sales hit C$2.79 billion, up 9.8 percent.
Analysts were expecting an average of 75 Canadian cents a share before items and revenue of C$2.78 billion, according to Reuters Estimates.
Shoppers shares edged 17 Canadian cents lower, to C$47.50, on the Toronto Stock Exchange shortly after the results were released.
“Because of their large franchise organization, they are immune to some of this (economic turmoil). People must still get their medicine,” said Kinsey.
(Additional reporting by Wojtek Dabrowski)
Reporting by Scott Anderson; Editing by Richard Valdmanis