Canadian Tire Corporation, Limited will be curtailing the expansion of its PartSource chain in view of lackluster retail segment performance for the company. While some segments showed strong growth, the retail segment grew only 1.5% in the quarter. Canadian Tire chief executive said that, while he was satisfied with the short term performance of the PartSource chain, the company wants to feel comfortable with the return the money invested before moving ahead. The company had set a goal of having 200 PartSource stores by 2004. Along with the Drivers/Auto Village chain it purchased last year, there are now 29 PartSource stores. The report comes as Canadian Tire makes its first-quarter financial accounting . In the quarter, the corporation reported consolidated net earnings of $28.7 million, compared to the $24.2 million recorded in the first quarter of 2000, an 18.9% increase. First quarter consolidated net earnings per share were $0.37, up 18.2% compared to $0.31 per share recorded in the first quarter of 2000. “We are pleased with our ability to deliver double digit earnings growth in a difficult operating environment,” said Wayne C. Sales, president and chief executive officer, Canadian Tire Corporation, Limited. “We had strong sales performance in hardware, housewares and home improvement; however, the timing of the start of the Spring selling season can cause variation in our seasonal business. In March, we experienced a significant impact in our seasonal business compared to 2000. April consumer spending on seasonal goods reversed this trend and increased nicely,” added Sales. During the first quarter the Corporation’s retail business was negatively impacted by the shift of consumer spending in the Spring selling season into the second quarter, and by incremental expenses compared to the same quarter last year associated with the continued development of growth initiatives including PartSource and the Corporation’s consumer online business. As a result, Canadian Tire Retail total and comparable store sales, and earnings contributions, were impacted. Consolidated gross operating revenue for the first quarter of 2001 was $1,135.3 million, up 2.8% from the $1,104.3 million recorded in the first quarter of 2001. The increase in gross operating revenue was due to growth in all three business units, led by an increase of 14.6% in Financial Services. Petroleum experienced a 3.7% increase in gross operating revenue in spite of an industry volume decline during the quarter, while Canadian Tire Retail gross operating revenues were up only 1.5% from the same quarter last year. Canadian Tire reported several highlights to shareholders for the quarter: – Four new-format stores were opened, bringing to 237 the total number of new-format stores that have been opened since the rebuilding program was initiated in 1994. – “Next Generation” merchandising, offering improved sightlines, navigation and expanded assortments, was introduced in those four new- format stores and retrofitted in 16 existing stores. – For the first time in the Corporation’s history, direct shopping via phone or online from the annual catalogue was introduced. – The product assortment available to shoppers visiting www.canadiantire.ca was expanded to 12,000 products, including 4,000 available from the catalogue. – PartSource, the Corporation’s standalone specialty automotive parts chain, opened one new store bringing the total to 29. PartSource also progressed significantly in completing the conversion of recently acquired Auto Village/Drivers stores to the PartSource format. – Financial Services continued its strategic progress in simplifying its business structure including the divestiture of Hamilton Discount Corporation Limited, while increasing performance from its continued investments in Canadian Tire-branded products and services. “Our focus on building shareholder value and in investing in our future growth and leadership remains unchanged. I am pleased with our progress on our strategic agenda and have great confidence in our ability to drive our organization to a new level of performance,” added Sales.