- Diluted Earnings Per Share (EPS) was $3.97; normalized diluted EPS was $4.20 per share
- Consolidated comparable sales were up 3.3% vs 2020 and up 21%
vs 2019
- Annual dividend to be increased 10.6% to $5.20 per share, reflecting 12 years of
consecutive increases, and share buybacks resumed with intention to
repurchase up to $400 million Class A
Shares
TORONTO, Nov. 11, 2021 /CNW/ - Canadian Tire Corporation,
Limited (TSX: CTC) (TSX: CTC.A) today released its third quarter
results for the period ended October 2,
2021.
"I am pleased with our results this quarter as we delivered
exceptional sales growth against 2019 and strong growth against
2020. Our customers continue to connect with us in-store and online
and our eCommerce sales remain at twice pre-pandemic levels,
demonstrating the success of our strengthened omni-channel
capabilities across our banners," said Greg
Hicks, President and CEO, Canadian Tire Corporation. "Our
strong supply chain capabilities have put us in an excellent
inventory position as we head into the important fourth quarter. We
are well-positioned through our unique multi-category assortments
to deliver the products our customers need as they prepare to
celebrate the holiday season."
"I am proud of the work the team has delivered to achieve our
previously committed operating efficiency target of $200+ million
in annualized savings ahead of schedule, as we continue to prove
our ability to transform our Company and invest to modernize our
business. We see the path to an additional $100 million in savings through 2022. Our
confidence in the Company's future is evidenced by the significant
increase in our dividend and the reinstatement of our share
repurchase program, which will see us repurchase up to $400 million by the end of 2022," continued
Hicks.
HIGHLIGHTS
- Consolidated comparable sales (excluding Petroleum) were up
3.3% vs the same quarter last year, and up 21% vs 2019, as
customers returned to in-store shopping
-
- Canadian Tire Retail (CTR) comparable sales were up 1.4%,
against the exceptional 25.1% increase achieved in 2020; backyard
living, gardening and hockey were among the top performing
businesses in the quarter
- Comparable store sales at SportChek were up 11.2% vs last year,
led by growth in athletic apparel, footwear, hockey, and team
sports
- At Mark's, comparable sales were up 7.9% vs last year, with
strong growth in men's casual wear, footwear, and industrial
apparel
- Compared to Q3 2019, comparable sales were up 25.3% at CTR,
7.0% at SportChek and 12.9% at Mark's
- Owned Brands penetration was 35% across the banners,
representing close to $1.3 billion of
sales in the quarter, with growth coming from Canvas, Raleigh, and Denver
Hayes
- Customers opted for a higher mix of in-store shopping as stores
reopened; digital visits increased to 162 million and eCommerce
penetration was almost double 2019 levels
- eCommerce sales were $257 million
in the quarter, and surpassed $2.1
billion on a rolling 12-month basis
- Continued engagement with Triangle Rewards members drove
solid contributions in the quarter
-
- Active Triangle members were up 7% and loyalty sales accounted
for 57% of retail sales in the quarter
- 36% of members shopped at more than one retail banner, with
newer members acquired at Mark's and SportChek driving traffic to
CTR
- Triangle Rewards members reached 10.7 million, with over
680,000 new members joining the program and strengthened engagement
efforts with existing members
- Consolidated normalized income before taxes at $388.8 million, down 13.6%
-
- Retail segment normalized income before taxes, at $245.4 million in the third quarter, was below
2020 but 27.3% higher than in the same quarter in 2019; four
consecutive quarters of exceptional Retail segment earnings have
driven retail ROIC to 13.2%
- Financial Services income before income taxes grew by
$27.2 million, or 30.0% to
$117.7 million
- Previously committed operational efficiency savings of $200+
million achieved ahead of schedule
-
- The Company is targeting an additional $100 million of annualized run rate savings
by the end of 2022
CONSOLIDATED OVERVIEW
- Consolidated retail sales increased $188.8 million in the third quarter, or 4.3% over
the same period in 2020; excluding Petroleum, consolidated retail
sales were up 1.6% over the same period last year
- Consolidated revenue decreased $73.3
million, or 1.8% in the third quarter; excluding Petroleum,
consolidated revenue decreased 5.6%
- Diluted EPS was $3.97 in the
quarter, down $0.87 per share, or
18%, compared to the prior year; normalized diluted EPS in the
quarter was $4.20, a decrease of
$0.73 per share or 14.8%
- Refer to the Q3 2021 MD&A section 3.1.1 for information on
normalizing items and for additional details on events that have
impacted the Company in the quarter
RETAIL SEGMENT OVERVIEW
- Retail segment revenue decreased $77.7
million, or 2.1% in the quarter. Excluding Petroleum, Retail
segment revenue decreased 6.2%, due to a decline in shipments to
Dealers at Canadian Tire. This followed significant increases in
shipments to Dealers in the first two quarters of 2021. While
Canadian Tire retail sales and revenue growth may diverge in any
quarter, it is the Company's experience that historically these
metrics tend to move together over the long-term.
- Retail revenue was up 9.4% compared to 2019 and excluding
Petroleum, up 11.1%, with Canadian Tire revenue up 14.1% compared
to 2019
- CTR retail sales in the quarter were relatively flat to last
year, down 0.6%, and comparable sales were up 1.4%
- SportChek retail sales were up 9.0% and comparable sales were
up 11.2%
- Mark's retail sales increased 10.5% and comparable sales were
up 7.9%
- Helly Hansen revenue was $157.6
million, up 1.5%, or 3% on a constant currency basis
- Gross margin rate up 17 bps, up across all retail banners, led
by CTR
- Income before income taxes decreased $99.7 million, or 30.5%; normalized income before
income taxes decreased $88.4 million
or 26.5%
- Refer to the Q3 2021 MD&A section 3.1.1 for information on
normalizing items and for additional details on events that have
impacted the Company in the quarter
FINANCIAL SERVICES OVERVIEW
- The Financial Services business has continued to perform well
in the third quarter as demonstrated by key metrics including
sales, customer payments and delinquency rates
- Revenue was up 2.1%, as gross average accounts receivable
increased 1.1% and credit card sales were up 23.3%, resulting in
higher merchant and interchange fees
- Gross margin improved 19.0% primarily due to lower net
impairment losses of $28.4
million
- Income before income taxes increased $27.2 million, or 30.0%
CT REIT OVERVIEW
- CT REIT delivered 6.5% growth in Adjusted Funds From Operations
(AFFO) per unit in the third quarter
- CT REIT announced nine new investments, at an estimated cost of
$109.5 million, adding approximately
449,000 square feet of incremental gross leasable area to the
portfolio upon completion
- For further information, refer to the Q3 2021 CT REIT earnings release issued November 8, 2021
CAPITAL ALLOCATION
CAPITAL EXPENDITURES
- Operating capital expenditures were $203.1 million in the quarter, up from
$132.9 million in the third quarter
of 2020
- Total capital expenditures were $221.2
million in the quarter, an increase of $140.0 million
- The full year operating capital expenditures for 2021 are
projected to range from $650 to
$700 million
QUARTERLY DIVIDEND
- The Company has approved a 10.6% increase in its annual
dividend from $4.70 to $5.20 per share, reflecting 12 years of
consecutive increases
- The Company declared dividends payable to holders of Class A
Shares and Common Shares at a rate of $1.300 per share payable on March 1, 2022 to shareholders of record as of
January 31, 2022. The dividend is
considered an "eligible dividend" for tax purposes.
SHARE BUYBACK
- The Company intends to repurchase up to $400 million of its Class A Shares, in excess of
the amount required for antidilutive purposes, by the end of fiscal
2022
- The share repurchases would commence under its previously
announced normal course issuer bid (the "2021-22 NCIB"), which
expires on March 1, 2022, and will
thereafter be renewed, subject to regulatory approval
AUTOMATIC SECURITIES PURCHASE PLAN
- The Company announced that it will enter into an automatic
securities purchase plan (the "ASPP") with a designated broker to
facilitate purchases of Class A Shares under its 2021-22 NCIB at
times when the Company would ordinarily not be permitted to
purchase its securities due to regulatory restrictions and
customary self-imposed black-out periods. Purchases made pursuant
to the ASPP will be made by the Company's designated broker based
upon the parameters prescribed by the TSX, applicable Canadian
securities laws and the terms of the written agreement between the
Company and its designated broker. The ASPP will commence prior to
the Company's 2021 fiscal year end and will terminate on the
earliest of the date on which: (i) the purchase limit under the
2021-22 NCIB has been reached; (ii) the 2021-22 NCIB expires; and
(iii) the Company terminates the ASPP in accordance with its terms.
The ASPP constitutes an "automatic securities purchase plan" under
applicable Canadian securities laws.
- The Company's proposed ASPP is subject to regulatory
approval
To view a PDF version of Canadian Tire Corporation's full
quarterly earnings report please see:
https://mma.prnewswire.com/media/1685621/Q3_2021_Combined_MDA_and_Financial_Statements__Final_Release.pdf
FORWARD-LOOKING STATEMENTS
Certain statements made in this press release, including with
respect to the Company's Operational Efficiency program, share
buyback intention and its 2021 full year operating capital
expenditures 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 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 10.0 (Key Risks and
Risk Management) of our Management's Discussion and Analysis for
the year ended January 2, 2021 as
well as CTC's other public filings, available at
www.sedar.com and at https://investors.canadiantire.ca. 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.
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 November 11, 2021. 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 more than 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.
SOURCE CANADIAN TIRE CORPORATION, LIMITED