Consolidated comparable sales1 were up 0.1%, following strong growth of 5.0% in Q2 2022
Normalized diluted Earnings Per Share1 ('EPS') was
Loyalty sales as a percentage of retail sales1 up 80 bps in the quarter
'As inflation persisted and rate hikes continued, consumer demand for discretionary goods softened, particularly in the latter half of the quarter, and Canadians shifted to more essentials within our multi-category assortment,' said
'Our ongoing commitment to our Better Connected strategy further positions us to deliver value over the long-term,' added Hicks. 'The investments we are making to integrate our customers' digital and in-store experiences continue to deliver strong results.'
SECOND QUARTER HIGHLIGHTS
Consolidated comparable sales were up 0.1%, following 5.0% growth in Q2 2022, as consumer spend softened in the latter part of the quarter, particularly in
Canadian Tire Retail comparable sales1 were up 0.1%, with a sales mix shift to more essential and value offerings. Automotive and Living grew, offsetting declines in Seasonal and Gardening, Playing and Fixing
SportChek comparable sales1 were up 0.1%. Team sports and lifestyle footwear grew, while athletic clothing and outerwear were down
Mark's comparable sales1 were up 0.4%, with industrial and casual footwear growing ahead of other categories and offsetting casualwear declines against strong growth in Q2 2022
Loyalty sales as a percentage of retail sales was up 80 bps, as loyalty sales continued to outperform non-loyalty sales
Normalized diluted EPS of
Normalizing items of
The previously-disclosed change in accounting estimate2 related to one component of the Company's Margin Sharing Arrangement (the 'MSA change') with its Dealers. The MSA change had a
Normalized consolidated income before income taxes1 ('IBT') was
Lower retail revenue, combined with strategic investments in the business, drove a decline in normalized retail earnings, despite faster than expected progress on the DC fire remediation and an 80 bps improvement in Retail gross margin rate1 (excluding the impact of the previously-disclosed MSA change). Normalized Retail segment IBT1 was
The Company'sBetterConnected initiatives have already proven to drive incremental sales and enhance connections to customers through an offering that has greater relevance and value:
More relevant and personalized offers to the Company's 11.5 million Triangle members to earn eCTM are being activated. Sales driven by personalized offers accounted for 6% of all sales in the last 12 months, with 1:1 offers on track to deliver more than
More than 10% of CTR stores, representing 13% of the CTR footprint, have now been refreshed, expanded or replaced since
The completion of the multi-year rollout of the Company's digital platform across all banners enhances the online experience for customers; eCommerce sales1 were
Progress on Owned Brands penetration was driven by ongoing growth in Automotive categories, with Canadian Tire Retail Owned Brand penetration1 up 20 bps, despite headwinds in discretionary categories
UPDATE ON FINANCIAL ASPIRATIONS
The current macroeconomic environment and consumer demand differ significantly from the Company's expectations when it set out its strategy and 2022-2025 financial aspirations (average annual Comparable sales growth, Retail Return on
Despite the near-term consumer demand environment, the Company remains committed to pursuing the strategic objectives that demonstrate its long-term vision and build on its strong market position. The Company also continues to invest in the strategic initiatives outlined in the Better Connected strategy to grow earnings, and continues to make progress on the key initiatives highlighted above, to solidify CTC's brand and competitive positioning in
CONSOLIDATED OVERVIEW
Unless otherwise specified, Consolidated results include the previously disclosed margin-sharing arrangement change2 which was effective from the first quarter of 2023
Revenue was
Consolidated income before income taxes was
Diluted EPS was
Refer to the Company's Q2 2023 MD&A section 4.1.1 for information on normalizing items and the MSA change and for additional details on events that have impacted the Company in the quarter
RETAIL SEGMENT OVERVIEW
Unless otherwise specified, Retail results include the previously disclosed margin-sharing arrangement change2 which was effective from the first quarter of 2023
Retail sales1 were
CTR retail sales1 were down 0.1% and comparable sales were up 0.1% over the same period last year
SportChek retail sales1 decreased 0.2% over the same period last year, and comparable sales were up 0.1%
Mark's retail sales1 increased 0.1% over the same period last year, and comparable sales were up 0.4%
Helly Hansen revenue was down 2.9% compared to the same period in 2022
Retail revenue was
Retail gross margin was
Normalized retail income before income taxes was
Retail Return on
Refer to the Company's Q2 2023 MD&A section 4.1.1 and 4.2.1 for information on normalizing items and the MSA change and for additional details on events that have impacted the Retail segment in the quarter
FINANCIAL SERVICES OVERVIEW
GAAR was up 8.2% relative to the prior year due to growth in average active accounts and average account balances. Growth in average active accounts and average account balances1 moderated compared to the prior quarter and prior year, and were up 3.7% and 4.3%, respectively, in the quarter
Financial Services gross margin was
Financial Services IBT was
Refer to the Company's Q2 2023 MD&A section 4.1.1 and 4.2.1 for information on normalizing items and section 4.3.1 and 4.3.2 for additional details on events that have impacted the Financial Services segment in the quarter
CT REIT OVERVIEW
Adjusted Funds From Operations1 ('AFFO') per unit was up 7.0% compared to Q2 2022; diluted net income per unit was up 27.0%
Announced three new investments totalling
Completed lease renewals for over 1.3 million square feet of GLA, representing more than 4% of total GLA
For further information, refer to the Q2
CAPITAL ALLOCATION
CAPITAL EXPENDITURES
The Company remains committed to its strategic direction and continues to invest in key priority areas, as outlined as part of the Better Connected strategy in
Operating capital expenditures were
Total capital expenditures were
QUARTERLY DIVIDEND
The Company declared dividends payable to holders of Class A Non-Voting Shares and Common Shares at a rate of
SHARE REPURCHASES
On
1) NON-GAAP FINANCIAL MEASURES AND RATIOS AND SUPPLEMENTARY FINANCIAL MEASURES
This press release contains non-GAAP financial measures and ratios and supplementary financial measures. References below to the Q2 2023 MD&A mean the Company's Management's Discussion and Analysis for the Second Quarter ended
A) Non-GAAP Financial Measures and Ratios
Normalized Diluted Earnings per Share (EPS)
Normalized diluted EPS, a non-GAAP ratio, is calculated by dividing Normalized Net Income Attributable to Shareholders, a non-GAAP financial measure, by total diluted shares of the Company. For information about these measures, see section 9.1 of the Company's Q2 2023 MD&A.
The following table is a reconciliation of normalized net income attributable to shareholders of the Company to the respective GAAP measures:
See full release at: https://corp.canadiantire.ca/English/media/news-releases/press-release-details/2023/Canadian-Tire-Corporation-Reports-Second-Quarter-2023-Results/default.aspx
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