Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }
TSX Real-Time Last Sale CAD
Today's Change
Price Quote as of

More stories below advertisement

Canadian Tire Corporation Reports First Quarter 2020 Results

CNW Group - Thu May 7, 5:05AM CDT

Strong retail fundamentals and eCommerce growth underlie performance in the quarter

Company well-positioned to compete for the long-term

Canadian Tire Corporation, Limited (TSX:CTC, TSX: CTC.A) today released its first quarter results for the period ended March 28, 2020.

"A company's true values take over at a time like this. For CTC, this means being there for Canadians no matter what challenges they face. For close to a century, we have risen to the challenge of an ever-changing retail landscape and this time will be no different. We are a resilient Company, built on a unique business model, supported by a strong Associate Dealer network, a multi-category assortment, our iconic Triangle Loyalty program and a proven Financial Services business," said Greg Hicks, President and CEO, Canadian Tire Corporation. "I am incredibly proud of how quickly we adapted and all that we have accomplished over the past several weeks, including the contributions of our Associate Dealers and our brave frontline workers."

"To date we have seen a quantum leap in our eCommerce performance across all of our banners and we have accelerated our planned investments in our digital capabilities to meet our customers' increased desire to shop online. I am very encouraged by early results in the second quarter, and I am confident that we will continue to successfully operate in this new normal and excel over the long-term," continued Hicks.


--  CTC remains focused on the safety of its customers and
        employees, demonstrating operational strength, resiliency and
        agility while navigating the COVID-19 crisis:
  o Implemented significant safety measures, including installing
    plexiglass cashier shields and floor decals, enhancing store
    cleaning procedures, reducing hours at Canadian Tire stores,
    introducing Curbside Pick Up and closing non-essential banners
  o Introduced a special support payment for frontline workers
  o Launched $5 million COVID-19 Response Fund to support frontline
    healthcare and community workers with essential products and PPE
  o Associate Dealers donated over 300,000 masks, 200,000 pairs of
    gloves, and 20,000 litres of hand sanitizer to local hospitals,
    nursing homes, and community organizations in need
--  Despite the unprecedented impacts of COVID-19 on consumer
        activity, Canadian Tire Retail delivered 0.7% comparable store
        sales against an exceptional Q1 in 2019. This marks the 24(th)
        consecutive quarter of positive comparable sales growth
  o Prior to the pandemic, consolidated comparable sales were tracking
    at 1.3% against prior year
  o In the quarter, consolidated comparable store sales across CTC were
    relatively flat at (0.3%) against a record performance of 6.1% in
    Q1 2019
--  In the quarter, diluted earnings per share (EPS) were
        negatively impacted by the significant effect of the pandemic
        on the global economy
  o Diluted EPS were $(0.22), normalized diluted EPS were $(0.13)
    compared to $1.12 in the prior year
  o Performance in the quarter was impacted by the following factors:
    # Decrease in revenue at SportChek, Mark's and Helly Hansen banners
      due to store closures
    # A $44.9 million or $0.43 EPS incremental increase in the
      allowance for loans receivable; comprised of $30 million to
      reflect the shift in macroeconomic environment and $14.9 million
      resulting from the increased probability of card holder default
    # A $41.8 million or $0.44 EPS net expense due to the significant
      decline in CTC's share price over the course of the first
      quarter, resulting in a mark-to-market adjustment on the
      Company's equity hedges related to share-based compensation
    # A $7.1 million or $0.09 EPS non-operational foreign exchange loss
      at Helly Hansen due to the significant drop in the Norwegian
--  Canadian Tire has taken aggressive action to ensure a strong
        cash position and financial flexibility, including:
  o Leveraging our Canadian banks and our high standing in capital
    markets to secure an additional $650 million credit facility from
    four Canadian Financial Institutions, in addition to the existing
    funding channels available to CTC and its related entities
  o Pausing the repurchase of shares
  o Implementing a plan to prudently manage working capital and
    operating costs across the enterprise
  o Deferring certain 2020 planned capital expenditures in all
    categories of projects, while maintaining our investment in key
    strategic initiatives such as eCommerce
--  CTC dramatically accelerated its digital and eCommerce efforts
        across all banners in response to rapidly shifting customer
  o eCommerce sales grew 44% in the quarter, led by close to 80% growth
    at CTR
  o Implemented Curbside Pick Up nationally in all CTR stores,
    resulting in the majority of Click & Collect orders designated as
    Curbside Pick Up
  o eCommerce daily average order volumes at CTR grew from 5k
    pre-COVID-19, to over 80k in April as website stability measures
    were implemented


--  Consolidated retail sales decreased $75.7 million or 2.7% in
        the first quarter. Excluding Petroleum, consolidated retail
        sales were down 2.3% over the same period last year.
    --  Consolidated revenue decreased $46.1 million, or 1.6%.
        Excluding Petroleum, consolidated revenue decreased $24.9
        million, or 1.0% in the quarter.
    --  Diluted EPS were $(0.22), normalized diluted EPS were $(0.13)
        compared to $1.12 in the prior year negatively impacted by the
        significant effect of the pandemic on the global economy.
    --  The Company remains committed to its Operational Efficiency
        program and the previous stated $200 million target in
        annualized saving by 2022.
    --  Refer to the MD&A section 5.1.1 for information on normalizing
        items and to section 3.0 for information on 'Significant Events
        that Impacted the Company this Quarter'.


--  The following financial results reflect Q1 2020 performance
        compared to Q1 2019:
  o Retail segment revenue decreased 2.4%. Excluding Petroleum, retail
    segment revenue decreased 1.8%.
  o Canadian Tire retail sales increased 2.2% and comparable sales were
    up 0.7%.
  o SportChek's retail sales decreased 13.1% and comparable sales
    decreased 1.8%.
  o Mark's retail sales were down 15.3% and comparable sales decreased
  o Helly Hansen revenue in the quarter was $121.5 million, a decrease
    of 7.3%. On a constant currency basis, Helly Hansen revenue grew
  o Normalized income before income taxes decreased $78.6 million
    negatively impacted by the significant effect of the pandemic on
    the global economy.
    --  Refer to the MD&A section 5.1.1 for information on normalizing
        items and to section 3.0 for information on 'Significant Events
        that Impacted the Company this Quarter'.


--  As disclosed in the Q1 2020 CT REIT earnings release on May 4,
        2020, CT REIT completed investments totalling $42.6 million and
        96.5% of tenants fulfilled their May 1, 2020 rent obligations.


--  In Q1 2020 revenue increased $13.1 million or 4% over the prior
        year due to higher credit charges resulting from growth of 4.2%
        in gross average credit card receivables (GAAR) over the prior
    --  Gross margin dollars declined 22.2% over the prior year
        primarily due to the $44.9 million increase in the allowance
        for loans receivable recorded in the quarter.
    --  Income before income taxes decreased 37.6% in the first quarter
        to $70.2 million.
    --  Financial Services continues to maintain a level of liquidity
        well in excess of required regulatory minimums.
    --  Refer to the MD&A section 3.0 for information on 'Significant
        Events that Impacted the Company this Quarter'.


--  As previously disclosed, the Company's Financial Aspirations
        covered a three-year period ending in 2020. While the Company
        remains committed to delivering long-term sustainable growth,
        there is considerable uncertainty regarding the duration and
        severity of COVID-19 and its impact on the economy, consumer
        demand and the Company's operations. As a result, Management is
        withdrawing its previously disclosed three-year (2018-2020)
        financial aspirations.


--  Operating capital expenditures were $69.1 million in the first
        quarter, down from $79.8 million in the first quarter of 2019.
    --  Total capital expenditures increased $7.4 million in Q1 2020,
        to $114 million.


--  The Company has declared dividends payable to holders of Class
        A Non-Voting Shares and Common Shares at a rate of $1.1375 per
        share payable on September 1, 2020 to shareholders of record as
        of July 31, 2020. The dividend is considered an "eligible
        dividend" for tax purposes.


--  On November 7, 2019, the Company announced its intention to
        repurchase a further $350 million of its Class A Non-Voting
        Shares, in excess of the amount required for anti-dilutive
        purposes, by the end of fiscal 2020. As at March 28, 2020,
        $107.8 million of such shares had been repurchased. Such
        purchases were paused after March 13, 2020.


--  On February 14, 2020, the Toronto Stock Exchange accepted the
        Company's notice of intention to make a normal course issuer
        bid to purchase up to 5.5 million Class A Non-Voting Shares
        between March 2, 2020 and March 1, 2021.

To view a PDF version of Canadian Tire Corporation's full quarterly earnings report please see:


Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements are being provided for the purposes of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our anticipated financial position, results of operations and operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Although CTC believes that the forward-looking information in this press release is based on information, assumptions and beliefs which are current, reasonable and complete, this information is necessarily subject to a number of factors, risks and uncertainties, including as a result of the outbreak of COVID-19, that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking information. For more information on the risks, uncertainties and assumptions that could cause the CTC's actual results to differ from current expectations, refer to section 2.8 (Risk Factors) of our Annual Information Form for fiscal 2019 and to section 10 (Key Risks and Risk Management) of our Management's Discussion and Analysis for the quarter ended March 28, 2020, as well as CTC's other public filings, available at and at CTC does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, except as is required by applicable securities laws.


Canadian Tire will conduct a conference call to discuss information included in this news release and related matters at 8:00 a.m. ET on May 7, 2020. The conference call will be available simultaneously and in its entirety to all interested investors and the news media through a webcast at and will be available through replay at this website for 12 months.


Canadian Tire Corporation, Limited, (TSX:CTC-A.TO) (TSX:CTC.TO) or "CTC", is a family of businesses that includes a Retail segment, a Financial Services division and CT REIT. Our 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 & Gardening divisions. Party City, PartSource and Gas+ are key parts of the Canadian Tire network. The Retail segment also includes Mark's, a leading source for casual and industrial wear; Pro Hockey Life, a hockey specialty store catering to elite players; and SportChek, Hockey Experts, Sports Experts, National Sports, Intersport and Atmosphere, which offer the best active wear brands. The more than 1,740 retail and gasoline outlets are supported and strengthened by CTC's Financial Services division and the tens of thousands of people employed across Canada and around the world by CTC and its local dealers, franchisees and petroleum retailers. In addition, CTC owns and operates Helly Hansen, a leading global brand in sportswear and workwear based in Oslo, Norway. For more information, visit

FOR MORE INFORMATION Media: Jane Shaw, (416) 480-8581, Investors: Lisa Greatrix, (416) 480-8725,


View original content to download multimedia:




More stories below advertisement

All market data (will open in new tab) is provided by Barchart Solutions. Copyright © 2020.

Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. For exchange delays and terms of use, please read disclaimer (will open in new tab).

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies