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Feb 26 (Reuters) - Retailer Canadian Tire Corp reported a fourth-quarter profit that comfortably beat analysts’ estimate, helped by strong sales of its automotive products and sports gear, pushing its shares up 8 percent to a record high on Thursday.
Same-store sales at Canadian Tire stores - which accounts for over half the company’s retail sales - rose 2.8 percent, as it sold more homeware products and winter tires for cars and light truck tires.
“We attribute the beat to stronger-than-expected same-store sales growth at the core Canadian Tire banner, a lower-than-expected increase in operating expenses in the retail segment, and strong results at the financial services segment,” BMO Capital analyst Peter Sklar said.
At FGL Sports, which sells an assortment of sports-related products, same-store sales rose 4.9 percent in the fourth quarter ended Jan. 3, led by strong sales in its largest brand, Sport Chek.
The company also sells casual and work clothing and footwear under the Mark’s brand.
Canadian Tire and other domestic retailers have been feeling the heat as U.S.-based rivals such as Wal-Mart Stores Inc and Amazon.com Inc expand into Canada.
Canadian Tire has, for the past year, said it was investing in technology to strengthen sales through a snazzier online presence and targeted digital advertising.
The company said on Thursday, total revenue, which includes revenue from financial services, rose nearly 10 percent to C$3.65 billion ($2.94 billion), helped in part by an additional week of operations.
That beat analysts’ average estimate of C$3.56 billion.
Net income attributable to Canadian Tire rose just under 2 percent to C$191.3 million, or C$2.44 per share.
According to Thomson Reuters I/B/E/S, the company earned C$2.59 per share excluding certain items, topping analysts’ average estimate of C$2.52.
The company said it earned C$2.65 per share, excluding items related to the sale of 20 percent of its financial services business to Bank of Nova Scotia . This figure is not comparable with the Thomson Reuters estimate.
Canadian Tire’s shares rose 8.4 percent to a record high of C$133.08 in afternoon trading. ($1 = C$1.2425) (Reporting by Manya Venkatesh in Bengaluru; Editing by Maju Samuel and Savio D‘Souza)