Canadian Tire

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Canadian Tire Corporation Reports First Quarter 2020 Results

May 07, 2020

Strong retail fundamentals and eCommerce growth underlie performance in the quarter

Company well-positioned to compete for the long-term

TORONTO, May 7, 2020 /CNW/ - Canadian Tire Corporation, Limited (TSX:CTC, TSX: CTC.A) today released its first quarter results for the period ended March 28, 2020.

"A company's true values take over at a time like this. For CTC, this means being there for Canadians no matter what challenges they face. For close to a century, we have risen to the challenge of an ever-changing retail landscape and this time will be no different. We are a resilient Company, built on a unique business model, supported by a strong Associate Dealer network, a multi-category assortment, our iconic Triangle Loyalty program and a proven Financial Services business," said Greg Hicks, President and CEO, Canadian Tire Corporation. "I am incredibly proud of how quickly we adapted and all that we have accomplished over the past several weeks, including the contributions of our Associate Dealers and our brave frontline workers."

"To date we have seen a quantum leap in our eCommerce performance across all of our banners and we have accelerated our planned investments in our digital capabilities to meet our customers' increased desire to shop online. I am very encouraged by early results in the second quarter, and I am confident that we will continue to successfully operate in this new normal and excel over the long-term," continued Hicks.


  • CTC remains focused on the safety of its customers and employees, demonstrating operational strength, resiliency and agility while navigating the COVID-19 crisis:
    • Implemented significant safety measures, including installing plexiglass cashier shields and floor decals, enhancing store cleaning procedures, reducing hours at Canadian Tire stores, introducing Curbside Pick Up and closing non-essential banners
    • Introduced a special support payment for frontline workers
    • Launched $5 million COVID-19 Response Fund to support frontline healthcare and community workers with essential products and PPE
    • Associate Dealers donated over 300,000 masks, 200,000 pairs of gloves, and 20,000 litres of hand sanitizer to local hospitals, nursing homes, and community organizations in need

  • Despite the unprecedented impacts of COVID-19 on consumer activity, Canadian Tire Retail delivered 0.7% comparable store sales against an exceptional Q1 in 2019. This marks the 24th consecutive quarter of positive comparable sales growth
    • Prior to the pandemic, consolidated comparable sales were tracking at 1.3% against prior year
    • In the quarter, consolidated comparable store sales across CTC were relatively flat at (0.3%) against a record performance of 6.1% in Q1 2019

  • In the quarter, diluted earnings per share (EPS) were negatively impacted by the significant effect of the pandemic on the global economy
    • Diluted EPS were $(0.22), normalized diluted EPS were $(0.13) compared to $1.12 in the prior year
    • Performance in the quarter was impacted by the following factors:
      • Decrease in revenue at SportChek, Mark's and Helly Hansen banners due to store closures
      • A $44.9 million or $0.43 EPS incremental increase in the allowance for loans receivable; comprised of $30 million to reflect the shift in macroeconomic environment and $14.9 million resulting from the increased probability of card holder default
      • A $41.8 million or $0.44 EPS net expense due to the significant decline in CTC's share price over the course of the first quarter, resulting in a mark-to-market adjustment on the Company's equity hedges related to share-based compensation awards
      • A $7.1 million or $0.09 EPS non-operational foreign exchange loss at Helly Hansen due to the significant drop in the Norwegian Krone

  • Canadian Tire has taken aggressive action to ensure a strong cash position and financial flexibility, including:
    • Leveraging our Canadian banks and our high standing in capital markets to secure an additional $650 million credit facility from four Canadian Financial Institutions, in addition to the existing funding channels available to CTC and its related entities
    • Pausing the repurchase of shares
    • Implementing a plan to prudently manage working capital and operating costs across the enterprise
    • Deferring certain 2020 planned capital expenditures in all categories of projects, while maintaining our investment in key strategic initiatives such as eCommerce

  • CTC dramatically accelerated its digital and eCommerce efforts across all banners in response to rapidly shifting customer behaviour
    • eCommerce sales grew 44% in the quarter, led by close to 80% growth at CTR
    • Implemented Curbside Pick Up nationally in all CTR stores, resulting in the majority of Click & Collect orders designated as Curbside Pick Up
    • eCommerce daily average order volumes at CTR grew from 5k pre-COVID-19, to over 80k in April as website stability measures were implemented


  • Consolidated retail sales decreased $75.7 million or 2.7% in the first quarter. Excluding Petroleum, consolidated retail sales were down 2.3% over the same period last year.
  • Consolidated revenue decreased $46.1 million, or 1.6%. Excluding Petroleum, consolidated revenue decreased $24.9 million, or 1.0% in the quarter.
  • Diluted EPS were $(0.22), normalized diluted EPS were $(0.13) compared to $1.12 in the prior year negatively impacted by the significant effect of the pandemic on the global economy.
  • The Company remains committed to its Operational Efficiency program and the previous stated $200 million target in annualized saving by 2022.
  • Refer to the MD&A section 5.1.1 for information on normalizing items and to section 3.0 for information on 'Significant Events that Impacted the Company this Quarter'.


  • The following financial results reflect Q1 2020 performance compared to Q1 2019:
    • Retail segment revenue decreased 2.4%. Excluding Petroleum, retail segment revenue decreased 1.8%.
    • Canadian Tire retail sales increased 2.2% and comparable sales were up 0.7%.
    • SportChek's retail sales decreased 13.1% and comparable sales decreased 1.8%.
    • Mark's retail sales were down 15.3% and comparable sales decreased 4.5%.
    • Helly Hansen revenue in the quarter was $121.5 million, a decrease of 7.3%. On a constant currency basis, Helly Hansen revenue grew 0.6%
    • Normalized income before income taxes decreased $78.6 million negatively impacted by the significant effect of the pandemic on the global economy.
  • Refer to the MD&A section 5.1.1 for information on normalizing items and to section 3.0 for information on 'Significant Events that Impacted the Company this Quarter'.


  • As disclosed in the Q1 2020 CT REIT earnings release on May 4, 2020, CT REIT completed investments totalling $42.6 million and 96.5% of tenants fulfilled their May 1, 2020 rent obligations.


  • In Q1 2020 revenue increased $13.1 million or 4% over the prior year due to higher credit charges resulting from growth of 4.2% in gross average credit card receivables (GAAR) over the prior year.
  • Gross margin dollars declined 22.2% over the prior year primarily due to the $44.9 million increase in the allowance for loans receivable recorded in the quarter.
  • Income before income taxes decreased 37.6% in the first quarter to $70.2 million.
  • Financial Services continues to maintain a level of liquidity well in excess of required regulatory minimums.
  • Refer to the MD&A section 3.0 for information on 'Significant Events that Impacted the Company this Quarter'.


  • As previously disclosed, the Company's Financial Aspirations covered a three-year period ending in 2020. While the Company remains committed to delivering long-term sustainable growth, there is considerable uncertainty regarding the duration and severity of COVID-19 and its impact on the economy, consumer demand and the Company's operations. As a result, Management is withdrawing its previously disclosed three-year (2018-2020) financial aspirations.


  • Operating capital expenditures were $69.1 million in the first quarter, down from $79.8 million in the first quarter of 2019.
  • Total capital expenditures increased $7.4 million in Q1 2020, to $114 million.


  • The Company has declared dividends payable to holders of Class A Non-Voting Shares and Common Shares at a rate of $1.1375 per share payable on September 1, 2020 to shareholders of record as of July 31, 2020. The dividend is considered an "eligible dividend" for tax purposes.


  • On November 7, 2019, the Company announced its intention to repurchase a further $350 million of its Class A Non-Voting Shares, in excess of the amount required for anti-dilutive purposes, by the end of fiscal 2020. As at March 28, 2020, $107.8 million of such shares had been repurchased. Such purchases were paused after March 13, 2020.


  • On February 14, 2020, the Toronto Stock Exchange accepted the Company's notice of intention to make a normal course issuer bid to purchase up to 5.5 million Class A Non-Voting Shares between March 2, 2020 and March 1, 2021.

To view a PDF version of Canadian Tire Corporation's full quarterly earnings report please see:


Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements are being provided for the purposes of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our anticipated financial position, results of operations and operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Although CTC believes that the forward-looking information in this press release is based on information, assumptions and beliefs which are current, reasonable and complete, this information is necessarily subject to a number of factors, risks and uncertainties, including as a result of the outbreak of COVID-19, that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking information. For more information on the risks, uncertainties and assumptions that could cause the CTC's actual results to differ from current expectations, refer to section 2.8 (Risk Factors) of our Annual Information Form for fiscal 2019 and to section 10 (Key Risks and Risk Management) of our Management's Discussion and Analysis for the quarter ended March 28, 2020, as well as CTC's other public filings, available at and at CTC does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, except as is required by applicable securities laws.


Canadian Tire will conduct a conference call to discuss information included in this news release and related matters at 8:00 a.m. ET on May 7, 2020. The conference call will be available simultaneously and in its entirety to all interested investors and the news media through a webcast at and will be available through replay at this website for 12 months.


Canadian Tire Corporation, Limited, (TSX: CTC.A) (TSX: CTC) or "CTC", is a family of businesses that includes a Retail segment, a Financial Services division and CT REIT. Our retail business is led by Canadian Tire, which was founded in 1922 and provides Canadians with products for life in Canada across its Living, Playing, Fixing, Automotive and Seasonal & Gardening divisions. Party City, PartSource and Gas+ are key parts of the Canadian Tire network. The Retail segment also includes Mark's, a leading source for casual and industrial wear; Pro Hockey Life, a hockey specialty store catering to elite players; and SportChek, Hockey Experts, Sports Experts, National Sports, Intersport and Atmosphere, which offer the best active wear brands. The more than 1,740 retail and gasoline outlets are supported and strengthened by CTC's Financial Services division and the tens of thousands of people employed across Canada and around the world by CTC and its local dealers, franchisees and petroleum retailers. In addition, CTC owns and operates Helly Hansen, a leading global brand in sportswear and workwear based in Oslo, Norway. For more information, visit

Media : Jane Shaw, (416) 480-8581, 
Investors: Lisa Greatrix, (416) 480-8725, 


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