UPDATE 2-Canadian Tire results hit by economy, weather

Thu Feb 11, 2010 11:01am EST

Related Topics

* Q4 EPS C$1.18 vs C$1.24 year earlier

* Adjusted EPS C$1.28 vs forecast C$1.42

* Revenue down 5.8 percent

* Shares down 2.7 percent (Adds details, analyst comments)

TORONTO, Feb 11 (Reuters) - Canadian Tire Corp (CTC.TO), (CTCa.TO) said on Thursday its quarterly earnings fell more than 5 percent, hurt by weak consumer confidence and an unseasonably warm start to the winter, and warned that additional costs could bite into future results.

The country's biggest auto parts and household goods retailer, earned C$96.2 million ($91 million), or C$1.18 a share in its fourth quarter, down 5.2 percent from C$101.5 million, or C$1.24 a share, a year earlier.

Revenue fell 5.8 percent to C$2.44 billion.

Adjusted to exclude non-operating items, earnings were C$104.4 million, or C$1.28 a share.

Analysts, on average, had expected earnings of C$1.42 a share, according to Thomson Reuters I/B/E/S.

Same-store sales, a key measure of the performance of stores open for more than a year, were down 9.4 percent from the year-earlier period, which had an additional week.

On a comparable calendar basis, same-store sales were down 4.1 percent.

"This is a relatively weak quarter. We expected some weakness in Canadian Tire (stores) performance, but the sales were definitely softer than we had expected," said Candice Williams, a retail analyst at Genuity Capital Markets in Vancouver.

The company's shares, which have risen 41 percent in the past year, were off 2.7 percent at C$53.65 on the Toronto Stock Exchange on Thursday morning.

Canadian Tire said its results were hurt by unseasonably warm weather in the key November sales period in the populous provinces of Ontario and Quebec, which resulted in slow sales of everything from low-cost snow shovels to big-ticket snow blowers.

Canadian Tire also sees some additional headwinds in 2010 which could bite into its results, including a C$5 million hit from the upcoming harmonization of federal and provincial sales taxes in Ontario and British Columbia, and C$10 million in costs to launch some programs at its retail stores.

It also said new credit card legislation due in 2010 would bring a pre-tax hit of between C$8 million and C$10 million because of the impact on interest charges, payment allocation methodology and credit limit increase approvals. It sees another C$8 million hit for the launch of a new chip card.

Genuity's Williams sees the retailer taking a hit of about 20 Canadian cents per share for the full year as a result of these charges.

($1=$1.06 Canadian) (Reporting by Scott Anderson; editing by Rob Wilson)

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