(Reuters) - Canadian Tire Corp Ltd (CTCa.TO), best known for its automotive and homeware stores, reported a stronger-than-expected 11 percent rise in quarterly profit as higher sales in all of its retail chains helped to fatten gross margins.
The company also raised its annual dividend to $1.75 per share from $1.40.
Same-store sales at its namesake retail brand rose 2 percent in the third quarter, driven by strong performances in automotive, seasonal and kitchen categories.
Canadian Tire stores sell items such as bicycles and skates, alongside home and automotive products.
Comparable sales at the company’s Mark’s chain, which sells men’s work clothes and boots, increased 4.3 percent.
Same-store sales at FGL Sports, acquired in 2011 when it was called Forzani Group Ltd, rose 6.3 percent. FGL operates the Sport Chek, Sports Experts and Atmosphere chains.
The company, which says that nearly 90 percent of Canadians live within 15 minutes of one of its stores or gas stations, reported an 8.2 percent rise in consolidated gross margin to C$70.1 million.
Revenue in its financial services business increased 5 percent to C$262.1 million.
Toronto-based Canadian Tire is looking to integrate its financial services business with its retail operations and said in August that it would seek a financial partner for its C$4.4 billion credit card portfolio.
The company’s real estate investment trust (CRT_u.TO) raised
$303.0 million in an initial public offering last month.
Canadian Tire also said on Thursday that it promoted Michael Medline to president of the company. Medline, who was most recently president of FGL Sports and Mark‘s, will report to Chief Executive Stephen Wetmore.
The company’s third-quarter net income rose to C$145.5 million ($139.7 million), or C$1.79 per share, from C$131.4 million, or C$1.61 per share, a year earlier.
By that measure, analysts had expected a profit of C$1.77, according to Thomson Reuters I/B/E/S.
($1 = 1.0415 Canadian dollars)
Reporting by Swetha Gopinath in Bangalore; Editing by Ted Kerr, Maju Samuel