Canadian Manufacturing

Canadian Tire reports Q4 profits up from a year ago

The retailer's in-house brands, such as Noma, Canvas, Sherwood and WindRiver, made up 40 per cent of the retailer's total sales.

February 17, 2022   The Canadian Press

Sales of Christmas, automotive and hockey products bumped up Canadian Tire Corp. Ltd.’s fourth-quarter profit and revenue and capped a record year for the nearly 100-year-old retailer.

The company, which operates multiple banners including Canadian Tire, SportChek, Mark’s, PartSource and Pro Hockey Life, benefited from a strong supply chain, in-stock inventory and e-commerce sales, president and CEO Greg Hicks said on Feb. 17.

“We successfully anticipated the wants and needs of our customers who were facing another Christmas spent at home while also considering the needs of those getting back on the road and back to the rink,” he told analysts during a conference call.

The retailer’s in-house brands, such as Noma, Canvas, Sherwood and WindRiver, made up 40 per cent of the retailer’s total sales in the quarter ended Jan. 1.

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“Across the North American retail industry, scarcity of inventory and pricing have led to a tremendous amount of brand switching by customers and private labels have benefited from this trend,” Hicks said.

Canadian Tire has focused on ordering goods early and bolstering its shipping and logistics network to ensure it has products in-stock, a strategy that’s helped boost sales, he said.

“Given the ongoing and significant supply chain challenges, we are continuing to build lead times into our supply chain processes as we assume that from sourcing to arrival at our distribution centres orders will take longer than in previous years,” Hicks said.

Canadian Tire topped expectations as it reported its fourth-quarter profit and revenue rose compared with a year ago, helped by higher comparable sales at its stores.

The retailer reported its net income attributable to shareholders totalled $508.5 million or $8.34 per diluted share for the quarter, up from $488.8 million or $7.97 per diluted share a year earlier.

Revenue for the 13-week period totalled $5.14 billion, up from $4.87 billion in the 14-week period ended Jan. 2, 2021.

The increase came as Canadian Tire store sales rose 3.4 per cent and comparable sales gained 9.8 per cent, while sales at its SportChek banner added 5.8 per cent and comparable sales gained 15.9 per cent. Sales at its Mark’s banner rose 9.6 per cent as comparable sales rose 15.0 per cent.

On a normalized basis, Canadian Tire said it earned $8.42 per diluted share, up from a normalized profit of $8.40 per diluted share a year earlier.

Analysts on average had expected a profit of $6.70 per share and $4.76 billion in revenue, according to financial markets data firm Refinitiv.