Canadian Tire profit beats as margins expand; div raised

Reuters

* Third-quarter profit C$1.79/share vs est.C$1.77

* Raises annual dividend by 25 pct to $1.75/share

Nov 7 (Reuters) - Canadian Tire Corp Ltd, bestknown for its automotive and homeware stores, reported astronger-than-expected 11 percent rise in quarterly profit ashigher sales in all of its retail chains helped to fatten grossmargins.

The company also raised its annual dividend to $1.75 pershare from $1.40.

Same-store sales at its namesake retail brand rose 2 percentin the third quarter, driven by strong performances inautomotive, 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 sellsmen's work clothes and boots, increased 4.3 percent.

Same-store sales at FGL Sports, acquired in 2011 when it wascalled Forzani Group Ltd, rose 6.3 percent. FGL operates theSport Chek, Sports Experts and Atmosphere chains.

The company, which says that nearly 90 percent of Canadianslive within 15 minutes of one of its stores or gas stations,reported an 8.2 percent rise in consolidated gross margin toC$70.1 million.

Revenue in its financial services business increased 5percent to C$262.1 million.

Toronto-based Canadian Tire is looking to integrate itsfinancial services business with its retail operations and saidin August that it would seek a financial partner for its C$4.4billion credit card portfolio.

The company's real estate investment trust raised $303.0 million in an initial public offering last month.

Canadian Tire also said on Thursday that it promoted MichaelMedline to president of the company. Medline, who was mostrecently president of FGL Sports and Mark's, will report toChief Executive Stephen Wetmore.

The company's third-quarter net income rose to C$145.5million ($139.7 million), or C$1.79 per share, from C$131.4million, 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.

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