TORONTO — Canadian Tire Corp. is diversifying with the purchase of 65 Party City stores across Canada for $174.4 million cash.
The Toronto-based company says it plans to add stand-alone stores and also make Party City's products available across 500 Canadian tire retail stores and online at Canadiantire.ca.
Party City Holdco Inc. says it will use proceeds from the sale to pay down debt. It will also have a long-term wholesale supply agreement with Canadian Tire through Amscan Inc., beginning with an initial term of 10 years.
The deal came as Canadian Tire announced second-quarter results, which included a 14 per cent increase in net income attributable to shareholders.
The $177.4-million profit was up from $156.0 million a year earlier, while earnings per diluted share increased 20.5 per cent to $2.87 from $2.38 in last year's second quarter when more shares were outstanding.
Revenue increased 5.9 per cent from last year to $3.67 billion from $3.48 billion, mostly from retailing through multiple banners including Canadian Tire, SportChek, Mark's and Helly Hansen.
Analysts had estimated $3.72 billion of revenue and $187.3 million or $3.01 per share of adjusted earnings, according to financial markets data firm Refinitiv.
Companies in this story: (TSX:CTC.A, TSX:CTC)
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