Canadian Tire reports Q1 loss compared with a profit a year ago, sales dip

Canadian Tire Corp. Ltd. reported a loss in its latest quarter as sales fell due to the steps taken to slow the spread of COVID-19, including the temporary closure of its SportChek and Mark's stores.

The retailer's loss attributable to shareholders totalled $13.3 million or 22 cents per diluted share for the quarter ended March 28. That compared with a profit attributable to shareholders of $69.7 million or $1.12 per diluted share a year ago.

Performance fell as did revenue at three of the company's banners: SportChek, Mark's and Helly Hansen.

Retail sales for the quarter were nearly $2.76 billion, down from $2.83 billion in the same quarter a year earlier.

Retail segment revenue fell 2.4 per cent, the company said, and 1.8 per cent excluding petroleum.

Retail sales at Canadian Tire fell 2.2 per cent, SportChek 13.1 per cent and Mark's 15.3 per cent. Comparable sales, a key retail metric, rose 0.7 per cent at Canadian Tire, but fell 1.8 per cent and 4.5 per cent at SportChek and Mark's, respectively.

On a normalized basis, Canadian Tire said it lost 13 cents per share for the quarter compared with a normalized profit of $1.12 per share in the first quarter of 2019.

Canadian Tire has "seen a quantum leap in our e-commerce performance" across its banners, said chief executive Greg Hicks, and noted the company has accelerated planned investments into digital capabilities.

E-commerce sales grew 44 per cent in the quarter, the company said, led by nearly 80 per cent growth at Canadian Tire for which the company implemented curbside pick up at all its stores across Canada.

Analysts on average had expected a loss of 11 cents per share and $2.79 billion in revenue, according to financial markets data firm Refinitiv.

"Disclosure around (the coronavirus) disruptions were less severe than we had modeled in both financial services and retail as well," wrote Irene Nattel, an analyst with RBC Dominion Securities, in a note.

Hicks said he is "very encouraged by early results in the second quarter, and I am confident that we will continue to successfully operate in this new normal and excel over the long-term."

This report by The Canadian Press was first published May 7, 2020

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