TORONTO, Aug. 10,
2023 /CNW/ - Canadian Tire Corporation, Limited
(TSX: CTC) (TSX: CTC.A) ("CTC" or the "Company") today released its
second quarter results for the period ended July 1, 2023.
- Consolidated comparable sales1 were up 0.1%,
following strong growth of 5.0% in Q2 2022
- Normalized diluted Earnings Per Share1 ("EPS") was
$3.08, compared to $3.11 in Q2 2022; Diluted EPS was $1.76, compared to $2.43 in Q2 2022
- Loyalty sales as a percentage of retail sales1 up 80
bps in the quarter
"As inflation persisted and rate hikes continued, consumer
demand for discretionary goods softened, particularly in the latter
half of the quarter, and Canadians shifted to more essentials
within our multi-category assortment," said Greg Hicks, President and CEO, Canadian Tire
Corporation. "Loyalty sales continue to outperform non-member
spend, driving an increase in loyalty penetration. During this time
of macroeconomic uncertainty, Triangle Rewards remains our most
important driver in delivering value for our customers."
"Our ongoing commitment to our Better Connected strategy
further positions us to deliver value over the long-term," added
Hicks. "The investments we are making to integrate our customers'
digital and in-store experiences continue to deliver strong
results."
SECOND QUARTER HIGHLIGHTS
- Consolidated comparable sales were up 0.1%, following 5.0%
growth in Q2 2022, as consumer spend softened in the latter part of
the quarter, particularly in Ontario
-
- Canadian Tire Retail comparable sales1 were up 0.1%,
with a sales mix shift to more essential and value offerings.
Automotive and Living grew, offsetting declines in Seasonal and
Gardening, Playing and Fixing
- SportChek comparable sales1 were up 0.1%. Team
sports and lifestyle footwear grew, while athletic clothing and
outerwear were down
- Mark's comparable sales1 were up 0.4%, with
industrial and casual footwear growing ahead of other categories
and offsetting casualwear declines against strong growth in Q2
2022
- Loyalty sales as a percentage of retail sales was up 80 bps, as
loyalty sales continued to outperform non-loyalty sales
- Normalized diluted EPS of $3.08
was down 1.0% on the prior year; diluted EPS was down $0.67 to $1.76
-
- Normalizing items of $107.9
million in the quarter reflected $74.6 million of direct costs relating to the
previously-disclosed March 2023
distribution centre fire ("DC fire"), recorded in the Retail
segment, and a $33.3
million GST/HST-related charge3 resulting from the
recently-enacted federal budget legislation, recorded in the
Financial Services segment
- The previously-disclosed change in accounting
estimate2 related to one component of the Company's
Margin Sharing Arrangement (the "MSA change") with its Dealers. The
MSA change had a $86.5 million impact
on revenue and income before income taxes, and 171 bps impact on
Retail gross margin rate excluding Petroleum1 during the
second quarter of 2023.
- Normalized consolidated income before income taxes1
("IBT") was $281.8 million,
compared to $284.3 million in the
prior year. Consolidated IBT was $173.9
million, compared to $238.1
million in the prior year:
-
- Lower retail revenue, combined with strategic investments in
the business, drove a decline in normalized retail earnings,
despite faster than expected progress on the DC fire remediation
and an 80 bps improvement in Retail gross margin rate1
(excluding the impact of the previously-disclosed MSA change).
Normalized Retail segment IBT1 was $160.2 million, compared to $170.0 million in Q2 of the prior year. Retail
segment income before income taxes was $85.6
million, compared to $123.8
million in the prior year.
- Normalized Financial Services IBT1 was down
$1.3 million to $88.7 million; Financial Services IBT was down
$34.6 million to $55.4 million. Gross Average Accounts
Receivables1 ("GAAR") growth of 8.2% reflected more
moderate growth in average account balances and average active
accounts. Higher net impairment losses and funding costs
contributed to lower gross margin, offsetting higher revenue.
Portfolio performance metrics are trending to historic levels, in
line with expectations.
- The Company's Better Connected initiatives have
already proven to drive incremental sales and enhance connections
to customers through an offering that has greater relevance and
value:
-
- More relevant and personalized offers to the Company's 11.5
million Triangle members to earn eCTM are being activated.
Sales driven by personalized offers accounted for 6% of all sales
in the last 12 months, with 1:1 offers on track to deliver more
than $150 million of incremental
sales in 2023.
- More than 10% of CTR stores, representing 13% of the CTR
footprint, have now been refreshed, expanded or replaced since
March 2022, driving incremental
sales. 22 store projects have been completed in 2023 to date.
- The completion of the multi-year rollout of the Company's
digital platform across all banners enhances the online experience
for customers; eCommerce sales1 were $1.1 billion during the last twelve months
- Progress on Owned Brands penetration was driven by ongoing
growth in Automotive categories, with Canadian Tire Retail Owned
Brand penetration1 up 20 bps, despite headwinds in
discretionary categories
UPDATE ON FINANCIAL ASPIRATIONS
- The current macroeconomic environment and consumer demand
differ significantly from the Company's expectations when it set
out its strategy and 2022-2025 financial aspirations (average
annual Comparable sales growth, Retail Return on Invested Capital
and Diluted EPS) at its Investor Day in March 2022. Since early 2022, the cumulative
effect of increasing inflationary pressure and higher interest
rates on consumer spend and financing costs, along with higher
inventory costs, has significantly impacted the Company's ability
to deliver against its previous expectations. Given the slower
pacing of growth, and the noticeable slowdown in retail sales
during the second quarter of 2023, the Company is withdrawing its
previously disclosed financial aspirations at this time.
- Despite the near-term consumer demand environment, the Company
remains committed to pursuing the strategic objectives that
demonstrate its long-term vision and build on its strong market
position. The Company also continues to invest in the strategic
initiatives outlined in the Better Connected strategy to
grow earnings, and continues to make progress on the key
initiatives highlighted above, to solidify CTC's brand and
competitive positioning in Canada
over the long-term.
CONSOLIDATED OVERVIEW
- Unless otherwise specified, Consolidated results include the
previously disclosed margin-sharing arrangement change2
which was effective from the first quarter of 2023
- Revenue was $4,255.8 million,
down 3.4% compared to $4,404.0
million in the same period last year; Revenue (excluding
Petroleum)1 was $3,706.8
million, a decrease of 0.5 percent compared to the prior
year
- Consolidated income before income taxes was $173.9 million, a decrease of $64.2 million compared to the prior year, due in
part to direct costs of $74.6 million
relating to the DC fire and $33.3
million relating to the GST/HST-related charge. Normalized
income before income taxes was $281.8
million, compared to $284.3
million in the prior year.
- Diluted EPS was $1.76 compared to
$2.43 in the prior year; Normalized
diluted EPS was $3.08, compared to
$3.11 in the prior year
- Refer to the Company's Q2 2023 MD&A section 4.1.1 for
information on normalizing items and the MSA change and for
additional details on events that have impacted the Company in the
quarter
RETAIL SEGMENT OVERVIEW
- Unless otherwise specified, Retail results include the
previously disclosed margin-sharing arrangement change2
which was effective from the first quarter of 2023
- Retail sales1 were $5,214.9
million, down 2.8%, compared to the second quarter of 2022,
with Petroleum driving the decrease; Retail sales (excluding
Petroleum)1 and consolidated comparable sales were down
0.1% and up 0.1%, respectively, against strong comparatives in the
prior year
- CTR retail sales1 were down 0.1% and comparable
sales were up 0.1% over the same period last year
- SportChek retail sales1 decreased 0.2% over the same
period last year, and comparable sales were up 0.1%
- Mark's retail sales1 increased 0.1% over the same
period last year, and comparable sales were up 0.4%
- Helly Hansen revenue was down 2.9% compared to the same period
in 2022
- Retail revenue was $3,896.1
million, a decrease of $171.1
million, or 4.2%, compared to the prior year; Retail revenue
(excluding Petroleum)1 was down 1.2%. Excluding the
favourable impact of the MSA change2, Retail revenue
(excluding Petroleum) was down $127.1
million.
- Retail gross margin was $1,250.9
million, up 5.8% compared to the second quarter of the prior
year, or up 5.9% excluding Petroleum1; Retail gross
margin rate (excluding Petroleum) increased 251 bps to 35.7%.
Excluding the favourable MSA change, Retail gross margin rate
(excluding Petroleum) was up 80 bps.
- Normalized retail income before income taxes was $160.2 million in Q2 2023, compared to
$170.0 million in the prior year.
Retail income before income taxes was $85.6
million, compared to retail income before income taxes of
$123.8 million in the prior
year.
- Retail Return on Invested Capital ("ROIC")1
calculated on a trailing twelve-month basis, was 11.2% at the end
of the second quarter of 2023, compared to 13.5% at the end of the
second quarter of 2022, due to the decrease in earnings and the
increase in Average Retail Invested Capital over the prior
period
- Refer to the Company's Q2 2023 MD&A section 4.1.1 and 4.2.1
for information on normalizing items and the MSA change and for
additional details on events that have impacted the Retail segment
in the quarter
FINANCIAL SERVICES OVERVIEW
- GAAR was up 8.2% relative to the prior year due to growth
in average active accounts and average account balances. Growth in
average active accounts and average account balances1
moderated compared to the prior quarter and prior year, and were up
3.7% and 4.3%, respectively, in the quarter
- Financial Services gross margin was $179.5 million, down 4.5% compared to the prior
year; higher net impairment losses and funding costs were partially
offset by strong revenue growth
- Financial Services IBT was $55.4
million, down from $90.0
million compared to the prior year; normalized Financial
Services IBT excluding the impact of the GST/HST-related charge was
$88.7 million, down 1.4%
- Refer to the Company's Q2 2023 MD&A section 4.1.1 and 4.2.1
for information on normalizing items and section 4.3.1 and 4.3.2
for additional details on events that have impacted the Financial
Services segment in the quarter
CT REIT OVERVIEW
- Adjusted Funds From Operations1 ("AFFO") per unit
was up 7.0% compared to Q2 2022; diluted net income per unit was up
27.0%
- Announced three new investments totalling $22.4 million, which are expected to add
approximately 53,000 square feet of incremental gross leasable area
("GLA") upon completion
- Completed lease renewals for over 1.3 million square feet of
GLA, representing more than 4% of total GLA
- For further information, refer to the Q2 2023 CT REIT earnings release issued on
August 8, 2023
CAPITAL ALLOCATION
CAPITAL EXPENDITURES
- The Company remains committed to its strategic direction and
continues to invest in key priority areas, as outlined as part
of the Better Connected strategy in March 2022. Full year operating capital
expenditures are now expected to be at the lower end of the
Company's previously disclosed operating capital
expenditures1 range of $750 to $800
million, with the timing of some projects shifted to
2024
- Operating capital expenditures were $138.4 million in the quarter, $30.4 million lower than Q2 2022, as a result of
timing of spend
- Total capital expenditures were $148.2
million, compared to $188.2
million in Q2 2022
QUARTERLY DIVIDEND
- The Company declared dividends payable to holders of Class A
Non-Voting Shares and Common Shares at a rate of $1.725 per share, payable on December 1, 2023, to shareholders of record as of
October 31, 2023. The dividend is
considered an "eligible dividend" for tax purposes.
SHARE REPURCHASES
- On November 10, 2022, the Company
announced its intention to repurchase an additional $500 million to $700
million of its Class A Non-Voting Shares (the "Shares"), in
excess of the amount required for anti-dilutive purposes, by the
end of 2023 as part of its capital management plan (the "2022-23
Share Repurchase Intention"). As at July 1,
2023, the Company had repurchased $420.8 million of its Shares in partial
fulfilment of its 2022-23 Share Repurchase Intention.
1) NON-GAAP FINANCIAL MEASURES AND RATIOS
AND SUPPLEMENTARY FINANCIAL MEASURES
This press release contains non-GAAP financial measures and
ratios and supplementary financial measures. References below to
the Q2 2023 MD&A mean the Company's Management's Discussion and
Analysis for the Second Quarter ended July
1, 2023, which is available on SEDAR+
at http://www.sedarplus.ca and is incorporated by reference
herein. Non-GAAP measures and non-GAAP ratios have no standardized
meanings under GAAP and may not be comparable to similar measures
of other companies.
A) Non-GAAP Financial Measures and
Ratios
Normalized Diluted Earnings per Share (EPS)
Normalized diluted EPS, a non-GAAP ratio, is calculated by
dividing Normalized Net Income Attributable to Shareholders, a
non-GAAP financial measure, by total diluted shares of the Company.
For information about these measures, see section 9.1 of the
Company's Q2 2023 MD&A.
The following table is a reconciliation of normalized net income
attributable to shareholders of the Company to the respective GAAP
measures:
|
|
|
YTD
|
YTD
|
(C$ in
millions)
|
Q2
2023
|
Q2 2022
|
Q2
2023
|
Q2 2022
|
Net income
|
$
126.9
|
$
177.6
|
$
169.7
|
$
395.2
|
Net income attributable
to shareholders
|
99.4
|
145.2
|
107.2
|
327.3
|
Add normalizing
items:
|
|
|
|
|
DC fire
|
$
54.9
|
—
|
$
104.8
|
—
|
GST/HST-related
charge1
|
24.7
|
—
|
24.7
|
—
|
Operational Efficiency
program
|
—
|
7.2
|
—
|
8.7
|
Helly Hansen Russia
exit
|
—
|
33.4
|
—
|
33.4
|
Normalized net
income
|
$
206.5
|
$
218.2
|
$
299.2
|
$
437.3
|
Normalized net
income attributable to shareholders1
|
$
174.0
|
$
185.8
|
$
231.7
|
$
369.4
|
Normalized diluted
EPS
|
$
3.08
|
$
3.11
|
$
4.07
|
$
6.16
|
|
|
1
|
$5.0 million relates to
non-controlling interests and is not included in the sum of
Normalized net income attributable to shareholders.
|
Consolidated Normalized Income Before Income Taxes, Retail
Normalized Income Before Income Taxes, and Financial
Services Normalized Income Before Income Taxes
Consolidated Normalized Income Before Income Taxes, Retail
Normalized Income before Income Taxes, and Financial Services
Normalized Income Before Income Taxes are non-GAAP financial
measures. For information about these measures, see section 9.1 of
the Company's Q2 2023 MD&A.
The following table reconciles Consolidated Normalized Income
Before Income Taxes to Income Before Income Taxes:
|
|
|
YTD
|
YTD
|
(C$ in
millions)
|
Q2
2023
|
Q2 2022
|
Q2
2023
|
Q2 2022
|
Income before income
taxes
|
$
173.9
|
$
238.1
|
$
240.5
|
$
533.0
|
Add normalizing
items:
|
|
|
|
|
DC fire
|
74.6
|
—
|
142.3
|
—
|
GST/HST-related
charge
|
33.3
|
—
|
33.3
|
—
|
Operational Efficiency
program
|
—
|
9.7
|
—
|
11.8
|
Helly Hansen Russia
exit
|
—
|
36.5
|
—
|
36.5
|
Normalized Income
before income taxes
|
$
281.8
|
$
284.3
|
$
416.1
|
$
581.3
|
The following table reconciles Retail Normalized (Loss) Income
Before Income Taxes to Income Before Income Taxes:
|
|
|
YTD
|
YTD
|
(C$ in
millions)
|
Q2
2023
|
Q2 2022
|
Q2
2023
|
Q2 2022
|
Income before income
taxes
|
$
173.9
|
$
238.1
|
$
240.5
|
$
533.0
|
Less: Other operating
segments
|
88.3
|
114.3
|
234.2
|
260.4
|
Retail Income before
income taxes
|
$
85.6
|
$
123.8
|
$
6.3
|
$
272.6
|
Add normalizing
items:
|
|
|
|
|
DC fire
|
74.6
|
—
|
142.3
|
—
|
Operational Efficiency
program
|
—
|
9.7
|
—
|
11.8
|
Helly Hansen Russia
exit
|
—
|
36.5
|
—
|
36.5
|
Retail Normalized
Income before income taxes
|
$
160.2
|
$
170.0
|
$
148.6
|
$
320.9
|
The following table reconciles Financial Services Normalized
Income before income taxes to Income before income taxes which is a
GAAP measure reported in the consolidated financial statements.
|
|
|
YTD
|
YTD
|
(C$ in
millions)
|
Q2
2023
|
Q2 2022
|
Q2
2023
|
Q2 2022
|
Income before income
taxes
|
$
173.9
|
$
238.1
|
$
240.5
|
$
533.0
|
Less: Other operating
segments
|
118.5
|
148.1
|
66.4
|
317.7
|
Financial Services
Income before income taxes
|
$
55.4
|
$
90.0
|
$
174.1
|
$
215.3
|
Add normalizing items:
GST/HST-related charge
|
33.3
|
—
|
33.3
|
—
|
Financial Services
Normalized Income before income taxes
|
$
88.7
|
$
90.0
|
$
207.4
|
$
215.3
|
CT REIT Adjusted Funds from Operations and AFFO per
unit
AFFO per unit, a non-GAAP ratio, is calculated by dividing AFFO
by the weighted average number of units outstanding on a diluted
basis. AFFO is a non-GAAP financial measure. The following table
reconciles GAAP Income before income taxes to FFO and further
reconciles FFO to AFFO:
|
|
|
YTD
|
YTD
|
(C$ in
millions)
|
Q2
2023
|
Q2 2022
|
Q2
2023
|
Q2 2022
|
Income before income
taxes
|
$
173.9
|
$
238.1
|
$
240.5
|
$
533.0
|
Less: Other operating
segments
|
64.5
|
158.3
|
60.6
|
360.1
|
CT REIT income before
income taxes
|
$
109.4
|
$
79.8
|
$
179.9
|
$
172.9
|
Add:
|
|
|
|
|
CT REIT fair value
(gain) adjustment
|
(31.6)
|
(6.0)
|
(27.4)
|
(28.1)
|
CT REIT deferred
taxes
|
0.4
|
—
|
0.8
|
0.6
|
CT REIT lease
principal payments on right-of-use assets
|
(0.2)
|
(0.1)
|
(0.5)
|
(0.3)
|
CT REIT fair value of
equity awards
|
(0.5)
|
(0.5)
|
(0.2)
|
(0.3)
|
CT REIT internal
leasing expense
|
0.3
|
0.2
|
0.5
|
0.4
|
CT REIT funds from
operations
|
$
77.8
|
$
73.4
|
$
153.1
|
$
145.2
|
Less:
|
|
|
|
|
CT REIT properties
straight-line rent revenue
|
(0.4)
|
0.5
|
(0.8)
|
0.9
|
CT REIT direct leasing
costs
|
0.4
|
0.1
|
0.6
|
0.2
|
CT REIT capital
expenditure reserve
|
6.1
|
6.2
|
12.4
|
12.4
|
CT REIT adjusted
funds from operations
|
$
71.7
|
$
66.6
|
$
140.9
|
$
131.7
|
Retail Return on Invested Capital
Retail Return on Invested Capital (ROIC) is calculated as Retail
return divided by the Retail invested capital. Retail return is
defined as trailing annual Retail after-tax earnings excluding
interest expense, lease related depreciation expense, inter-segment
earnings, and any normalizing items. Retail invested capital is
defined as Retail segment total assets, less Retail segment trade
payables and accrued liabilities and inter-segment balances based
on an average of the trailing four quarters. Retail return and
Retail invested capital are non-GAAP financial measures. For more
information about these measures, see section 9.1 of the Company's
Q2 2023 MD&A.
|
|
Rolling 12 months
ended
|
(C$ in
millions)
|
|
Q2
2023
|
|
Q2 2022
|
Income before income
taxes
|
$
|
1,291.3
|
$
|
1,622.8
|
Less: Other operating
segments
|
|
509.6
|
|
485.6
|
Retail Income before
income taxes
|
$
|
781.7
|
$
|
1,137.2
|
Add normalizing
items:
|
|
|
|
|
Operational Efficiency
program
|
|
35.4
|
|
37.1
|
Helly Hansen Russia
exit
|
|
—
|
|
36.5
|
DC fire
|
|
142.3
|
|
—
|
Retail Normalized
Income before income taxes
|
$
|
959.4
|
$
|
1,210.8
|
Less:
|
|
|
|
|
Retail intercompany
adjustments1
|
|
214.8
|
|
199.6
|
Add:
|
|
|
|
|
Retail interest
expense2
|
|
283.2
|
|
241.0
|
Retail depreciation of
right-of-use assets
|
|
616.7
|
|
562.6
|
Retail effective tax
rate
|
|
27.3 %
|
|
26.5 %
|
Add: Retail
taxes
|
|
(448.1)
|
|
(480.7)
|
Retail
return
|
$
|
1,196.4
|
$
|
1,334.1
|
|
|
|
|
|
Average total
assets
|
$
|
22,079.3
|
$
|
21,470.6
|
Less: Average assets in
other operating segments
|
|
4,380.6
|
|
4,822.1
|
Average Retail
assets
|
$
|
17,698.7
|
$
|
16,648.5
|
Less:
|
|
|
|
|
Average Retail
intercompany adjustments1
|
|
3,526.0
|
|
3,481.0
|
Average Retail trade
payables and accrued liabilities3
|
|
2,994.4
|
|
2,712.7
|
Average Franchise Trust
assets
|
|
484.9
|
|
456.1
|
Average Retail excess
cash
|
|
—
|
|
114.4
|
Average Retail
invested capital
|
$
|
10,693.4
|
$
|
9,884.3
|
Retail
ROIC
|
|
11.2 %
|
|
13.5 %
|
|
|
1
|
Intercompany
adjustments include intercompany income received from CT
REIT which is included in the Retail segment, and intercompany
investments made by the Retail segment in CT REIT and
CTFS.
|
2
|
Excludes Franchise
Trust.
|
3
|
Trade payables and
accrued liabilities include trade and other payables, short-term
derivative liabilities, short-term provisions and income tax
payables.
|
Operating Capital Expenditures
Operating capital expenditures is a non-GAAP financial measure.
For more information about this measure, see section 9.1 of the
Company's Q2 2023 MD&A.
The following table reconciles total additions from the
Investing activities reported in the Consolidated Statement of Cash
Flows to Operating capital expenditures:
|
|
|
YTD
|
YTD
|
(C$ in
millions)
|
Q2
2023
|
Q2 2022
|
Q2
2023
|
Q2 2022
|
Total
additions1
|
$
78.9
|
$
120.6
|
$
208.0
|
$
280.6
|
Add: Accrued
additions
|
69.3
|
67.6
|
51.4
|
61.9
|
Less:
|
|
|
|
|
CT REIT acquisitions
and developments excluding vend-
ins from CTC
|
9.8
|
19.4
|
21.4
|
31.7
|
Operating capital
expenditures
|
$
138.4
|
$
168.8
|
$
238.0
|
$
310.8
|
|
|
1
|
This line appears on
the Consolidated Statement of Cash Flows under Investing
activities.
|
B) Supplementary Financial Measures and
Ratios
The measures below are supplementary financial measures.
See Section 9.2 (Supplementary
Financial Measures) of the Company's Q2 2023 MD&A for
information on the composition of these measures.
- Consolidated retail sales
- Consolidated comparable sales
- Revenue (excluding Petroleum)
- Retail revenue (excluding Petroleum)
- Retail sales and retail sales (excluding Petroleum)
- Canadian Tire Retail comparable and retail sales
- SportChek comparable and retail sales
- Mark's comparable and retail sales
- Retail gross margin rate and retail gross margin rate
(excluding Petroleum)
- Gross Average Accounts Receivables (GAAR)
- Average account balances
- Loyalty sales as a percentage of retail sales
- Canadian Tire Retail Owned Brand penetration
- eCommerce sales
2) Change in Accounting
Estimate (the "MSA change")
The Company's contract with its Dealers governs how margin and
expenses are shared between the two groups.
Beginning in the first quarter of 2023, the Company implemented
a change to accounting estimates associated with one component of
the contract, the Margin Sharing Arrangement (MSA) with the
Dealers. The Company already records a portion of its margin
relating to revenue and margin on shipments to its Dealers in the
quarter incurred, but the majority of the MSA has historically been
accrued in the fourth quarter of every year.
Effective with the first quarter of 2023, the Company began to
record the MSA throughout the year to better reflect the pattern
over which the MSA is earned. This change simply reflects a change
in the timing of this revenue and will result in less quarterly
fluctuation in Retail segment gross margin and income before income
taxes throughout the year. This change impacts quarterly results.
There is no change to the annual reported figures.
The change in accounting estimate had a $86.5 million impact on revenue and income before
income taxes, and 171 bps impact on Retail segment gross margin
rate excluding Petroleum during the second quarter of 2023.
Excluding the MSA change, consolidated revenue was down
$234.7 million, Retail segment gross
margin rate excluding Petroleum was up 80 bps, and consolidated
income before income taxes was down $150.7
million.
3) Impact of Bill C-47 GST/HST Legislative
Amendments (the "GST/HST-related charge")
The 2023 Federal Budget, released on March 28, 2023, included certain tax measures
affecting Canadian Tire Bank, specifically a proposal to amend the
definition of "financial services" to exclude clearing services
rendered by a payment card network operator. On June 22, 2023, Bill C-47, which included this
proposal, received Royal Assent and as a result, these services are
subject to GST/HST both prospectively and retroactively, with
a one-year deadline from Royal Assent for the CRA to reassess prior
periods that are statute-barred. As a result, a $33.3 million provision was recorded in the
quarter in Selling, general and administrative expenses and
Provisions in the Consolidated Statements of Income and
Consolidated Balance Sheet. This was treated as a normalizing item
in the Financial Services segment.
To view a PDF version of Canadian Tire Corporation's full
quarterly earnings report please see:
https://mma.prnewswire.com/media/2183027/CANADIAN_TIRE_CORPORATION__LIMITED_Canadian_Tire_Corporation_Rep.pdf
FORWARD-LOOKING STATEMENTS
This press release contains information that may constitute
forward-looking information within the meaning of applicable
securities laws. Forward-looking information provides insights
regarding management's current expectations and plans and allows
investors and others to better understand the Company's anticipated
financial position, results of operations and operating
environment. Readers are cautioned that such information may not be
appropriate for other purposes. Although the Company believes that
the forward-looking information in this press release is based on
information, assumptions and beliefs that are current, reasonable,
and complete, such information is necessarily subject to a number
of business, economic, competitive and other risk factors that
could cause actual results to differ materially from management's
expectations and plans as set forth in such forward-looking
information. The Company cannot provide assurance that any
financial or operational performance, plans, or aspirations
forecast will actually be achieved or, if achieved, will result in
an increase in the Company's share price. For information on the
material risk factors and uncertainties and the material factors
and assumptions applied in preparing the forward-looking
information that could cause the Company's actual results to differ
materially from predictions, forecasts, projections, expectations
or conclusions, refer to section 10.0 (Key Risks and Risk
Management) of the Company's Q2 2023 MD&A as well as CTC's
other public filings, available at
https://www.sedarplus.ca and at
https://investors.canadiantire.ca. The Company 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.
CONFERENCE CALL
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 Thursday, August 10,
2023. The conference call will be available simultaneously
and in its entirety to all interested investors and the news media
through a webcast at https://investors.canadiantire.ca and will be
available through replay at this website for 12 months.
ABOUT CANADIAN TIRE CORPORATION
Canadian Tire Corporation, Limited, (TSX: CTC.A) (TSX: CTC) or
"CTC", is a group of companies 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 and Atmosphere, which
offer the best active wear brands. The Company's 1,700 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 technical outdoor brand based in Oslo, Norway. For more information, visit
Corp.CanadianTire.ca.
FOR MORE INFORMATION
Media:
Stephanie Nadalin, (647) 271-7343,
stephanie.nadalin@cantire.com
Investors: Karen Keyes, (647)
518-4461, karen.keyes@cantire.com
SOURCE CANADIAN TIRE CORPORATION, LIMITED