Mr. Stephen Wetmore reports

CANADIAN TIRE CORPORATION REPORTS STRONG FIRST QUARTER RESULTS

Canadian Tire Corp. Ltd. has released first quarter results for the period ended April 1, 2017.

"We have delivered strong earnings performance in both our financial services and retail segment, and in particular we saw strong revenue growth at CTR. The organization is focused on the right initiatives for 2017 and we have good momentum leading into our primary selling seasons," said Stephen Wetmore, president and chief executive officer, Canadian Tire.

Consolidated overview

• Consolidated retail sales increased $95.0-million, or 3.8 per cent, in the first quarter. Excluding petroleum, consolidated retail sales were up 1.4 per cent over the same period last year.
• Consolidated revenue increased $194.1-million, or 7.6 per cent, which includes a $62.4-million increase in Petroleum revenue resulting from higher per litre gas prices. Excluding petroleum, consolidated revenue increased $131.7-million, or 6.0 per cent, in the quarter.
• Diluted earnings per share were $1.24 in the quarter, an increase of 34 cents per share, or 37.8 per cent, over the first quarter of 2016.

Retail overview

• Retail segment revenue increased 8.5 per cent in the first quarter compared with last year. Excluding petroleum, retail segment revenue increased 6.8 per cent in Q1.
• Retail margin rate excluding petroleum was relatively flat to the prior year, down seven basis points.
• Income before income taxes increased $23.8-million, or 115.3 per cent, over the first quarter of 2016.
• Canadian Tire retail saw retail sales increase 2.0 per cent and same-store sales were up 0.5 per cent compared with the prior year.
• FGL Sports' retail sales were down 1.4 per cent and same-store sales were down 2.7 per cent in the first quarter of 2017. Same-store sales at Sport Chek were down 4.3 per cent.
• Mark's retail sales grew 5.7 per cent and same-store sales increased 5.4 per cent compared with the same period last year.

CT REIT overview

• As disclosed in the Q1 2017 CT REIT earnings release on May 9, 2017, CT REIT announced four investments made in the quarter at an estimated total cost of $42-million.

Financial services overview

• Income before income taxes increased 4.3 per cent in the first quarter to $97.6-million.
• In Q1 2017, gross average credit card receivables (GAAR) were up 5.8 per cent over the prior year.

Capital expenditures

• Operating capital expenditures were $68.1-million in the first quarter, down from $86.5-million in the first quarter of 2016.
• As previously announced, the company expects its three-year annual operating capital expenditure investment to be within the range of $450-million to $500-million.

Quarterly dividend

• The company has declared dividends payable to holders of Class A non-voting shares and common shares at a rate of 65 cents per share payable on Sept. 1, 2017, to shareholders of record as of July 31, 2017. The dividend is considered an eligible dividend for tax purposes.

Share repurchase

• On Nov. 10, 2016, the company announced its intention to repurchase $550.0-million of its Class A non-voting shares, in excess of the amount required for anti-dilutive purposes, by the end of 2017. As at April 1, 2017, the company had repurchased $137.5-million, leaving $412.5-million to be repurchased during the remainder of fiscal 2017.

Normal course issuer bid update

• On Feb. 23, 2017, the Toronto Stock Exchange accepted the company's notice of intention to make a normal course issuer bid to purchase up to six million Class A non-voting shares between March 2, 2017, and March 1, 2018.

Conference call

Canadian Tire will conduct a conference call to discuss information included in this news release and related matters at 3 p.m. ET on May 11, 2017. The conference call will be available simultaneously and in its entirety to all interested investors and the news media through a webcast at the company's website and will be available through replay at this website for 12 months.

About Canadian Tire Corp. Ltd.

Canadian Tire is a family of businesses that includes a retail segment, a financial services division and CT REIT. The company's retail business is led by Canadian Tire, which was founded in 1922 and provides Canadians with products for life in Canada across its living, playing, fixing, automotive and seasonal categories. The retail segment also includes Mark's, a leading source for casual and industrial wear, and FGL Sports (Sport Chek, Hockey Experts, Sports Experts, National Sports, Intersport, Pro Hockey Life and Atmosphere), and offers the best active wear brands. The 1,700 retail and gasoline outlets are supported and strengthened by the company's financial services division and the tens of thousands of people employed across the company.

                    CONSOLIDATED FINANCIAL RESULTS
                   (in-millions, except where noted)

                                                   Q1 2017    Q1 2016

Retail sales                                      $2,577.2   $2,482.2
Revenue                                            2,753.5    2,559.4
Gross margin dollars                                 972.9      914.0
Gross margin as a % of revenue                       35.3%      35.7%
Other (income)                                           -       (3.1)
Selling, general and administrative expenses         799.1      777.4
Net finance costs                                     24.8       20.9
Income before income taxes                           149.0      118.8
Income taxes                                          41.1       33.2
Effective tax rate                                   27.6%      28.0%
Net income                                           107.9       85.6
Net income attributable to
Shareholders of Canadian Tire                         87.5       66.5
Non-controlling interests                             20.4       19.1
                                                     107.9       85.6
Basic EPS                                             1.24       0.90
Diluted EPS                                           1.24       0.90

We seek Safe Harbor.