Canadian Tire Corporation Ltd. reported comparable-store sales at SportChek improved 28.6 percent year-over-year in the second quarter ended July 3. Compared to 2019, comparable sales were up 5.1 percent at SportChek. Helly Hansen’s external revenue was $100.6 million, up 45.9 percent year-over-year.

Among its other banners, CTR comparable sales were down 2.0 percent overall, with gardening, seasonal recreation, camping, and automotive categories all growing double digits in the quarter. Compared to 2019, comparable sales were up 18.3 percent, with growth in over 70 percent of categories.

Mark’s was up 43.2 percent year over year and up slightly versus 2019.

Canadian Tire said the performance in the quarter marked the fourth consecutive quarter of strong retail segment earnings drove a significant increase in EPS and exceptional retail ROIC at 14.1 percent.

“I am pleased with our strong results, which clearly demonstrated our omnichannel capabilities and the growing customer connection to our brand. With a third of our stores impacted by closures, and many more subjected to restrictions during the quarter, our customers embraced our digital channels, driving eCommerce sales to record levels and doubling the volume of orders compared to last quarter,” said Greg Hicks, president and CEO, Canadian Tire Corporation. “Demand for our Owned Brands reached 38 percent of total sales across our Canadian Tire, SportChek and Mark’s banners and helped drive our strong product margins.”

“We continued to grow our Triangle Rewards program, welcoming almost 600,000 new customers in the quarter, with active members up 11 percent,” added Hicks.

Consolidated Overview
(figures in Canadian dollars)

  • Consolidated retail sales increased $506.9 million in the second quarter, or 11.6 percent. over the same period in 2020;
  • Excluding Petroleum, consolidated retail sales were up 8.2 percent over the same period last year;
  • Consolidated revenue increased $756.7 million, or 23.9 percent, in the second quarter. Excluding Petroleum, consolidated revenue increased 20.4 percent; and
  • Diluted EPS was $3.64 in the quarter, up $3.97 per share compared to the prior year. Normalized diluted EPS in the quarter was $3.72, an increase of $3.97 per share.

Retail Segment Overview

  • Retail segment revenue increased $773.4 million, or 27.1 percent. Excluding Petroleum, Retail segment revenue increased 23.4 percent over the same period last year;
  • CTR retail sales increased 1.9 percent and comparable sales were down 2.0 percent;
  • SportChek retail sales were up 39.8 percent and comparable sales were up 28.6 percent;
  • Mark’s retail sales increased 58.0 percent and comparable sales were up 43.2 percent;
  • Helly Hansen external revenue was $100.6 million, up 45.9 percent; and
  • Income before income taxes increased $274.8 million over the same period in 2020. Normalized income before income taxes increased $275.3 million.

Financial Services Overview

  • The Financial Services business has continued to perform well through the pandemic as demonstrated by key metrics, including sales, customer payments and delinquency rates;
  • Lower outstanding receivables, consistent with industry trends, resulted in a decline in revenue of 4.5 percent in the quarter;
  • Gross margin improved $86.8 million, or 68.8 percent compared to the same period in 2020, primarily due to lower net impairment costs which reflected a $31.0 million reduction to the allowance for loans receivable and lower net write-offs; and
  • Income before income taxes increased $74.3 million, or 145.7 percent over the same period last year.

CT REIT Overview

  • CT REIT delivered 8.2 percent growth in Adjusted Funds From Operations (AFFO) per unit in the second quarter; and
  • CT REIT announced five new investments, which will require an estimated total investment of $60.3 million to complete, adding approximately 266,000 square feet of incremental gross leasable area to the portfolio upon completion.