/C O R R E C T I O N from Source -- Canadian Tire Corporation, Limited/
Canada NewsWire
TORONTO, Nov. 7, 2024
In the news release, "Canadian Tire Corporation Reports Third Quarter 2024 Results; Announces Annual Dividend Increase for 15th Consecutive Year and Share Repurchase Intention", issued 07-Nov-2024 by Canadian Tire Corporation, Limited over CNW, we are advised by the company that it has made a non-material adjustment to the text in the second bullet point of the "Consolidated Overview". The complete, corrected release follows:
Canadian Tire Corporation Reports Third Quarter 2024 Results; Announces Annual Dividend Increase for 15th Consecutive Year and Share Repurchase Intention
TORONTO, Nov. 7, 2024 /CNW/ - Canadian Tire Corporation, Limited (TSX: CTC) (TSX: CTC.A) (CTC or the Company) today released its third quarter results for the period ended September 28, 2024.
-- Consolidated comparable sales1 trend improved compared to Q2 2024;
consolidated comparable sales were down 1.5% compared to Q3 2023.
-- Diluted and Normalized Earnings Per Share1 (EPS) were $3.59, compared to
$(1.19) in Q3 2023, and up 21.3% from $2.96 on a normalized basis.
-- Annualized dividend increased from $7.00 to $7.10 per share, alongside an
intention to repurchase up to $200.0 million of Class A Non-Voting Shares
in 2025.
"We delivered strong retail profitability for the third consecutive quarter and sales trends improved," said Greg Hicks, President and CEO, Canadian Tire Corporation. "With customer spending still constrained, Canadians are seeking value and finding it through Triangle Rewards, where more loyalty members earned and redeemed with us at higher levels this quarter."
"We continue to control costs and manage margins carefully, in order to balance lingering consumer and economic headwinds. At the same time, the investments we have made over the last two years position us well, with better omnichannel experiences, higher customer satisfaction scores, and a positive reaction to new products as they hit our shelves."
THIRD-QUARTER HIGHLIGHTS
-- Consolidated comparable sales were down 1.5%; SportChek grew for the
first quarter since Q2 2023, which partially offset declines at Canadian
Tire Retail $(CTR)$ and Mark's.
-- CTR comparable sales1 were down 2.2%, compared to Q3 2023.
Customers continued to prioritize essential categories including
Automotive, which continued to perform well against a strong
quarter in Q3 2023, led by growth in automotive service.
-- SportChek comparable sales1 were up 2.9%, marking two consecutive
quarters in which SportChek outperformed industry trends. Targeted
promotional events and improved customer experience continued to
be a focus and contributed to growth in athletic footwear and
hockey categories.
-- Mark's comparable sales1 were down 2.3%, led by industrial wear
declines, which were partially offset by growth in men's shorts
and t-shirts. Children's wear was a top performer, as a result of
the ongoing strategic rollout of the category to select Mark's
stores.
-- Increased loyalty engagement saw active registered loyalty members up 4%;
members took advantage of 1:1 offers, engaged in mass Triangle promotions,
and scanned their loyalty cards more.
-- In-store Net Promoter Score (NPS) was up across the Company's banners,
including CTR; store investments and a focus on strong in-stock
availability of key brands continued to drive improvements in positive
customer sentiment.
-- Improved retail profitability led to higher Consolidated Income Before
Income taxes $(IBT.UK)$ at $299.3 million, an increase of $230.0 million and
$33.0 million on a normalized basis1 compared to the prior year.
-- Retail IBT was $164.8 million, down $74.2 million and up $56.8
million on a normalized basis1. A strong retail gross margin rate1
combined with solid cost control offset a decline in retail
revenue. IBT also benefited from higher other income, which
equated to around $0.41 of impact at the EPS level, as a result of
a property sale gain and insurance recoveries.
-- Financial Services IBT was $110.3 million in the quarter, a $15.4
million decrease from the prior year, as higher net write-offs and
operating expenses were only partially offset by higher revenues,
all while cardholder engagement remained strong. Gross Average
Accounts Receivable1 (GAAR) was up 3.0%, mainly as a result of
higher average account balances.
-- CTC continues to make solid progress on the key areas within its Better
Connected strategy to enhance the customer experience and drive
efficiencies, with almost $1.7 billion in capital invested since 2022.
Accomplishments in the third quarter included:
-- A richer in-store and digital customer experience: Store
investments are proceeding at pace, with four new Party City
stores added in Q3, and 39 CTR store refresh projects expected to
be completed by the end of 2024 (taking the total to 120 since
2022). By year end, more than 90% of Canadian Tire's 502 stores
are expected to have deployed technology enhancements such as
electronic shelf labels and lockers, and more than 60% of CTC's
1,400 retail locations will have enhanced broadband capabilities.
-- Improved supply chain productivity: Previously announced supply
chain investments and consolidation are improving productivity and
savings, including increased throughput as a result of
goods-to-person automation, which is now fully operational at the
Company's Calgary and Montreal Distribution Centres $(DC)$. The last
stage of planned supply chain investments will include the phased
rollout of CTC's new transportation management system, and a new
Vancouver DC set to open in 2025.
-- Continued margin accretion from Owned Brands successes: Continued
strength in categories like automotive and hockey is contributing
to margin accretion, with Owned Brand penetration1 relatively flat
despite pressure in some discretionary categories. A pipeline of
innovative and quality Owned Brand products are set to roll out
during 2025.
CONSOLIDATED OVERVIEW
-- Revenue was $4,192.9 million, down 1.4% compared to $4,250.5 million in
the same period last year; Revenue (excluding Petroleum)1 was $3,639.8
million, a decrease of 0.4% compared to the prior year.
-- Consolidated income before income taxes was $299.3 million, up $230.0
million compared to the prior year. On a normalized basis, consolidated
income before income taxes was up $33.0 million.
-- Diluted EPS was $3.59, compared to $(1.19) or $2.96 on a normalized basis
in the prior year.
-- Refer to the Company's Q3 2024 MD&A section 4.1 for information on
normalizing items and additional details on events that have impacted the
Company in the quarter.
RETAIL SEGMENT OVERVIEW
-- Retail sales1 were $4,539.5 million, down 2.2%, compared to the
third quarter of 2023. Retail sales (excluding Petroleum)1 and
consolidated comparable sales were down 1.4% and 1.5%, respectively.
-- CTR retail sales1 were down 2.0% and comparable sales were down 2.2% over
the same period last year.
-- SportChek retail sales1 increased 2.0% over the same period last year,
and comparable sales were up 2.9%.
-- Mark's retail sales1 decreased 2.0% over the same period last year, and
comparable sales were down 2.3%.
-- Helly Hansen revenue was down 6.0% compared to the same period in 2023,
mainly due to a shift in the timing of shipments to wholesale customers.
-- Retail revenue was $3,797.8 million, a decrease of $69.5 million, or 1.8%,
compared to the prior year; Retail revenue (excluding Petroleum)1 was
down 0.8%.
-- Retail gross margin was $1,214.8 million, up 0.6% compared to the third
quarter of the prior year, and up 1.0% excluding Petroleum1; Retail gross
margin rate (excluding Petroleum) increased 62 bps to 35.7%.
-- Retail IBT was $164.8 million in Q3 2024, compared to $239.0 million or
$108.0 million on a normalized basis in the prior year.
-- Retail Return on Invested Capital $(ROIC)$,1 calculated on a trailing
twelve-month basis, was 8.8% at the end of the third quarter of 2024,
compared to 11.1% at the end of the third quarter of 2023, due to the
decrease in earnings over the prior period.
-- Refer to the Company's Q3 2024 MD&A sections 4.2.1 for information on
normalizing items and additional details on events that have impacted the
Retail segment in the quarter.
FINANCIAL SERVICES OVERVIEW
-- Financial Services segment Income before income taxes was $110.3 million
in the quarter, a $15.4 million decrease from the prior year, as higher
net write-offs and operating expenses were only partially offset by
higher revenues, all while cardholder engagement remained strong.
-- GAAR was up 3.0% relative to the prior year, driven by growth in average
account balances, which were up 3.4%.
-- Refer to the Company's Q3 2024 MD&A section 4.3.1 and 4.3.2 for
additional details on events that have impacted the Financial Services
segment in the quarter.
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