Canadian Tire Corporation, Limited (CTC), parent of the Helly Hansen brand and the SportChek, Sports Experts, Atmosphere, Pro Hockey Life, Sports Rousseau, Hockey Experts, and Mark’s retail banners, saw the consolidated comparable sales trend for the third quarter improve sequentially from Q2 2024, while comp sales were down 1.5 percent year-over-year compared to Q3 2023.
Canadian Tire reports in Canadian dollars (CN$) unless otherwise indicated.
Revenue was CN$4.19 billion in the third quarter ended September 29, down 1.4 percent compared to CN$4.25 billion in the Q3 period last year. Revenue (excluding Petroleum) was CN$3.64 billion, a decrease of 0.4 percent compared to the prior-year Q3 period.
Retail revenue was CN$3.80 billion in Q3, a decrease of CN$69.5 million, or 1.8 percent, compared to the prior-year quarter. Retail revenue (excluding Petroleum) was down 0.8 percent year-over-year.
Retail sales were CN$4,539.5 million, down 2.2 percent yer-over-year, compared to the third quarter of 2023. Retail sales (excluding Petroleum) were down 1.4 percent and consolidated comparable sales were down 1.5 percent year-over-year.
SportChek posted its first quarterly growth since Q2 2023, with revenue up 0.6 percent to CN$521.5 million, compared to CN$518.3 million in Q3 last year. This partially offset declines at Canadian Tire Retail (CTR) and Mark’s.
SportChek retail sales increased 2.0 percent year-over-year, cycling a 7.6 percent decline in Q3 last year. SportChek comparable sales were up 2.9 percent for the quarter, cycling a 7.4 percent comp decline in Q3 last year, marking two consecutive quarters in which SportChek outperformed industry trends. Targeted promotional events and improved customer experience reportedly continued to be a focus and contributed to growth in athletic footwear and hockey categories.
Sportchek sales per square foot were CN$315 in the quarter, down from CN$324 in the year-ago quarter. Sportchek and 367 doors at the end of the quarter, three less than the year-ago end of quarter.
Mark’s revenue was down 2.0 percent year-over-year to CN$316.1 million. Retail sales decreased 2.0 percent year-over-year, and comparable sales were down 2.3 percent, reportedly led by industrial wear declines, which were partially offset by growth in men’s shorts and t-shirts. Children’s wear was said to be a top performer, as a result of the ongoing strategic rollout of the category to select Mark’s stores.
Helly Hansen revenue was down 6.0 percent to CN$205.7 million in the third quarter, compared to CN$219.2 million in the Q3 period in 2023, said to be mainly due to a shift in the timing of shipments to wholesale customers. On a constant-currency basis, Helly Hansen revenue was down 5.8 percent to CN$211.2 million.
CTR retail sales were down 2.0 percent and CTR comparable sales were down 2.2 percent, 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.
Retail gross margin was CN$1.21 billion, up 0.6 percent compared to the third quarter of the prior-year quarter, and up 1.0 percent excluding Petroleum. Retail gross margin rate (excluding Petroleum) increased 62 bps to 35.7 percent.
Retail IBT was CN$164.8 million in Q3 2024, compared to CN$239.0 million or CN$108.0 million on a normalized basis in the prior year.
Retail Return on Invested Capital (ROIC), calculated on a trailing twelve-month basis, was 8.8 percent at the end of the third quarter of 2024, compared to 11.1 percent at the end of the third quarter of 2023, due to the decrease in earnings over the prior period.
Increased loyalty engagement saw active registered loyalty members up 4 percent. Members reportedly 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) at CN$299.3 million, an increase of CN$230.0 million and CN$33.0 million on a normalized basis1 compared to the prior-year third quarter.
Retail IBT was CN$164.8 million, down CN$74.2 million and up CN$56.8 million on a normalized basis. A strong retail gross margin rate combined with solid cost control offset a decline in retail revenue. IBT also benefited from higher other income, which equated to around CN$0.41 of impact at the EPS level, as a result of a property sale gain and insurance recoveries.
Gross Average Accounts Receivable (GAAR) was up 3.0 percent, mainly as a result of higher average account balances.
Consolidated income before income taxes was CN$299.3 million, up CN$230.0 million, due in part to the costs related to the A.J. Billes Distribution Centre fire and the GST/HST-related charge recorded in the prior year. On a normalized basis, consolidated income before income taxes was up CN$33.0 million.
Diluted and Normalized Earnings Per Share (EPS) were CN$3.59 per share in Q3, compared to a loss of CN$1.19 per share in Q3 2023, and up 21.3 percent from CN$2.96 on a normalized basis.
Image courtesy SportChek/Canadian Tire Corporation, Limited
