/C O R R E C T I O N from Source -- Canadian Tire Corporation, Limited/

CNW Group
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In the news release, "Canadian Tire Corporation Reports Third Quarter 2024 Results; Announces Annual Dividend Increase for 15th Consecutive Year and Share Repurchase Intention", issued 07-Nov-2024 by Canadian Tire Corporation, Limited over CNW, we are advised by the company that it has made a non-material adjustment to the text in the second bullet point of the "Consolidated Overview". The complete, corrected release follows:

Canadian Tire Corporation Reports Third Quarter 2024 Results; Announces Annual Dividend Increase for 15th Consecutive Year and Share Repurchase Intention

TORONTO, Nov. 7, 2024 /CNW/ - Canadian Tire Corporation, Limited (TSX: CTC) (TSX: CTC.A) (CTC or the Company) today released its third quarter results for the period ended September 28, 2024.

  • Consolidated comparable sales1 trend improved compared to Q2 2024; consolidated comparable sales were down 1.5% compared to Q3 2023.

  • Diluted and Normalized Earnings Per Share1 (EPS) were $3.59, compared to $(1.19) in Q3 2023, and up 21.3% from $2.96 on a normalized basis.

  • Annualized dividend increased from $7.00 to $7.10 per share, alongside an intention to repurchase up to $200.0 million of Class A Non-Voting Shares in 2025.

"We delivered strong retail profitability for the third consecutive quarter and sales trends improved," said Greg Hicks, President and CEO, Canadian Tire Corporation. "With customer spending still constrained, Canadians are seeking value and finding it through Triangle Rewards, where more loyalty members earned and redeemed with us at higher levels this quarter."

"We continue to control costs and manage margins carefully, in order to balance lingering consumer and economic headwinds. At the same time, the investments we have made over the last two years position us well, with better omnichannel experiences, higher customer satisfaction scores, and a positive reaction to new products as they hit our shelves."

THIRD-QUARTER HIGHLIGHTS

  • Consolidated comparable sales were down 1.5%; SportChek grew for the first quarter since Q2 2023, which partially offset declines at Canadian Tire Retail (CTR) and Mark's.

    • CTR comparable sales1 were down 2.2%, 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.

    • SportChek comparable sales1 were up 2.9%, marking two consecutive quarters in which SportChek outperformed industry trends. Targeted promotional events and improved customer experience continued to be a focus and contributed to growth in athletic footwear and hockey categories.

    • Mark's comparable sales1 were down 2.3%, led by industrial wear declines, which were partially offset by growth in men's shorts and t-shirts. Children's wear was a top performer, as a result of the ongoing strategic rollout of the category to select Mark's stores.

  • Increased loyalty engagement saw active registered loyalty members up 4%; members 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 $299.3 million, an increase of $230.0 million and $33.0 million on a normalized basis1 compared to the prior year.

    • Retail IBT was $164.8 million, down $74.2 million and up $56.8 million on a normalized basis1. A strong retail gross margin rate1 combined with solid cost control offset a decline in retail revenue. IBT also benefited from higher other income, which equated to around $0.41 of impact at the EPS level, as a result of a property sale gain and insurance recoveries.

    • Financial Services IBT was $110.3 million in the quarter, a $15.4 million decrease from the prior year, as higher net write-offs and operating expenses were only partially offset by higher revenues, all while cardholder engagement remained strong. Gross Average Accounts Receivable1 (GAAR) was up 3.0%, mainly as a result of higher average account balances.

  • CTC continues to make solid progress on the key areas within its Better Connected strategy to enhance the customer experience and drive efficiencies, with almost $1.7 billion in capital invested since 2022. Accomplishments in the third quarter included:

    • A richer in-store and digital customer experience: Store investments are proceeding at pace, with four new Party City stores added in Q3, and 39 CTR store refresh projects expected to be completed by the end of 2024 (taking the total to 120 since 2022). By year end, more than 90% of Canadian Tire's 502 stores are expected to have deployed technology enhancements such as electronic shelf labels and lockers, and more than 60% of CTC's 1,400 retail locations will have enhanced broadband capabilities.

    • Improved supply chain productivity: Previously announced supply chain investments and consolidation are improving productivity and savings, including increased throughput as a result of goods-to-person automation, which is now fully operational at the Company's Calgary and Montreal Distribution Centres (DC). The last stage of planned supply chain investments will include the phased rollout of CTC's new transportation management system, and a new Vancouver DC set to open in 2025.

    • Continued margin accretion from Owned Brands successes: Continued strength in categories like automotive and hockey is contributing to margin accretion, with Owned Brand penetration1 relatively flat despite pressure in some discretionary categories. A pipeline of innovative and quality Owned Brand products are set to roll out during 2025.

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