As part of its strategic plan update, Canadian Tire Corporation, Limited says it will add 20 new format stores to its Canadian Tire chain in 2003, launch a new retail concept store, and add as many as 10 new PartSource stores.
In an announcement later today, Canadian Tire is also expected to reconfirm its 2002 earnings estimate within the previously communicated range of $2.42 to $2.47 per share.
PartSource has been focused on enhancing its operational processes and systems overall during the past five quarters, says the company. Still, comparable store sales increases have ranged from 11 to 16%. PartSource will open 6-10 stores in 2003, incremental to its existing base of 33 stores. Approximately 30% of these stores’ business is currently in the to the trade.
During this same Outlook Period, the company plans to open approximately 20 new-format replacement stores each year. As part of this program, approximately 30 of the new stores will be in incremental locations, bringing the total store network to more than 480 stores.
The company has also CTR initiated work on a new concept store, called Concept 20/20, that is designed to increase first-year comparable store sales by 20% in each new concept store. This new retail sales growth concept features a combination of in-store and exterior design changes, new merchandising and value-added services such as gift registries, special orders, and delivery and assembly. The first prototype new concept store is targeted for the Fall of 2003, with market specific testing in the Spring of 2003 for various value-added services.
Canadian Tire’s Strategic Plan, launched in September 2001, established objectives over the Outlook Period from 2001-2005 as follows: Revenue growth of greater than 10%; Comparable store sales growth of 3-4%; Earnings Per Share (EPS) growth of 12-15%; Earnings Before Interest, Income Taxes, Depreciation and Amortization (EBITDA) growth of 10 -15%; and Return on Invested Capital of greater than 10% after tax compound average annual growth rate.
As of the second quarter of 2002 the corporation has achieved performance in these measures as follows: 10% growth in gross operating revenue; 3% growth in comparable store sales; 10.8% growth in earnings per share; 13.2% growth in EBITDA; and 8.3% return on invested capital.
“We are making good progress in the execution of our balanced portfolio of strategies," says Wayne Sales, president and CEO. "These strategies will accelerate growth in our core existing businesses while we explore new opportunities that leverage our strengths and strategic assets for the longer-term.”
Canadian Tire Retail is targeting retail sales to grow approximately $1.4 billion to $6.7 billion annually by the end of the Outlook Period of 2001-2005, with 3 to 4% annual growth in comparable store sales.
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