(Toronto) On Thursday, Canadian Tire reported better-than-expected earnings and revenues for the fourth quarter compared to last year.
Head of retailer Greg Hicks told investors that these results are “nothing short of exceptional” and that full-year performance has been strong despite operational challenges brought on by the pandemic.
Consolidated sales of at least one year open storefront, for all brands, recorded a “record” growth of 9.5% in the fourth quarter, while online sales increased 142%, the president and CEO said.
Canadian Tire is the owner of the Canadian Tire, L’Équipeur, Sports Experts, Atmosphere and Sport Check brands.
For Canadian Tire stores that were open for at least a year, sales were up 12.8%, and seasonal holiday sales advanced 41% in the quarter, Hicks noted, with online sales jumping 179%.
“Although the first two quarters of the year were severely affected by the epidemic, the team achieved exceptional results,” Mr. Hicks said, ending the year with “exceptional financial and operational results.”
Canadian Tire also announced the closure of its 18 National Sports stores in Southern Ontario to reduce duplication of the company’s sporting goods offering and achieve efficiencies.
The company indicated that it would try to transfer the affected employees to other stores in its family of brands.
According to Hicks, the decision to close National Sports is part of its strategy to increase efficiency and focus on assets deemed essential.
“It was a smaller store for us for sure, but the decision to close is a matter of focus,” Hicks told investors. “There has always been a very, very large amount of repetition between this brand, Sport Chek (and Canadian Tire),” he explained.
Sport Chek does not have a presence in Quebec, as the company’s main sports channel is Sports Experts.
Hicks added that in addition to the density of physical stores, duplicates have also joined the e-commerce capacity of various brands.
“This was a company that had got enough capital to meet maintenance needs over the years, and it wasn’t an important asset to us,” he said.
National Sports was launched in 1968 as National Gym Clothing, according to their website. The stores are expected to close by the end of June.
High profits and revenues
Canadian Tire reported earnings attributable to shareholders of $ 488.8 million, or $ 7.97 per share, for the quarter ended January 2. By comparison, Canadian Tire reported a profit of 334.1 million, or $ 5.42 per share, for the fourth quarter of last year.
Revenue rose to $ 4.87 billion from $ 4.32 billion a year earlier.
On a revised basis, Canadian Tire reported earnings per share of $ 8.40, up from $ 5.53 in the same quarter the previous year.
Analysts had expected, on average, a revised earnings per share of $ 6.69, from revenue of $ 4.83 billion, according to forecasts compiled by financial data company Refinitiv.
Irene Nattel, an analyst at RBC Dominion Securities, said in a note to clients that Canadian Tire’s strong fourth-quarter results underscored the “unique positioning (of the company) of Canadian consumers.”
For the full year, Canadian Tire generated net income attributable to shareholders of $ 751.8 million, or $ 12.31 per share, from sales of $ 14.87 billion. By comparison, in fiscal 2019, the retailer generated similar earnings of 778.4 million, or $ 12.58 per share, from revenue of 14.53 billion.