Canadian Tire’s (CTC-A.TO) sales showed resilience in the second quarter, yet expenses related to its new growth strategy hampered earnings.
As at 10:41 a.m. ET, shares were trading on the Toronto Stock Exchange at $171.50, down 7.35 per cent.
“Customer confidence showed signs of recovery from March lows in the face of continued uncertainty,” said CEO Greg Hicks, on the Toronto-based retailer’s earnings call Thursday morning.
Canadian Tire reported second-quarter revenue of $4.2 billion, up 5.2 per cent compared to the same period last year. Same-store sales, which exclude newly opened locations, rose 5.6 per cent overall. At Canadian Tire, same-store sales climbed 6.4 per cent, driven largely by seasonal and gardening products, while Mark’s increased one per cent and SportChek rose 3.9 per cent.
However, the company’s profit took a hit, largely due to the sale of its former Helly Hansen brand and a new, four-year growth strategy called True North, which was unveiled in March.
The retail giant says its net income attributable to shareholders fell to $168.2 million or $2.04 per diluted share this quarter, from $207.7 million or $3.56 per diluted share a year ago.
The Truth North strategy includes new, modernized store concepts, expansion of the company’s Triangle Rewards program through partnerships with RBC and WestJet, and an enhanced go-to-market approach. The company has committed over $2 billion to the strategy and expects the benefits to start materializing through 2026.
Year-to-date, the retailer has refreshed 14 Canadian Tire retail stores, and opened one new Mark’s and SportChek store, respectively, Hicks says. The company enhanced a total of 21 stores in 2024, with more than 30 planned for the rest of the year.
The Truth North plan also includes reducing corporate staff, an exercise that began last week, to improve agility and better compete with global competitors.
“We have been in a period of meaningful reductions designed to remove layers and drive decision-making closer to our customers,” Hicks said.
The company expects restructuring and reductions to be mostly completed in its third quarter. Hicks did not disclose how many employees would be impacted.
