Canadian Tire Corporation Reports First Quarter 2023 Results

Canadian Tire Corporation, Limited (CTC) has released its first quarter results for the period ended April 1, 2023.

  • Diluted Earnings Per Share (EPS) of $0.13 included the impact of costs relating to the fire at the Company’s A.J. Billes distribution centre in Brampton, Ontario on March 15, 2023; normalized diluted EPS1 was $1.00
  • Financial Services delivered a strong contribution, at $118.7 million of income before income taxes (IBT)

“Our Q1 financial results were impacted by a number of factors. Our Retail segment was impacted by the fire at our A.J. Billes distribution centre, as well as unseasonably mild winter weather and a slow start to spring in several regions of Canada,” said Greg Hicks, President and CEO, Canadian Tire Corporation. “Our unrivalled competitive advantage lies in our deep understanding of Canadians, and in the context of a challenging macroeconomic environment, we intend to fully leverage this strength to maximize returns.”

First Quarter Highlights

  • Consolidated comparable sales were down 2.5% versus strong growth in 2022, in a more challenging consumer demand environment, driven by the impact of a mild winter and late arrival of spring
  • Canadian Tire Retail comparable sales were down 4.8%. Lower sales of winter and spring products were partially offset by growth in non-winter related Automotive categories and in Living categories, driven by an expanded pet offering
  • Consolidated income before income taxes was $66.6 million, a decrease of $228.3 million compared to the prior year, with Financial Services segment income offset by a loss of $79.3 million in the Retail segment, resulting in diluted EPS of $0.13. Excluding the direct costs relating to the fire at the Company’s A.J. Billes distribution centre, normalized IBT1 was $134.3 million and normalized diluted EPS was $1.00. Results for the quarter also included the impact of a change in accounting estimate2 relating to the Company’s Margin-Sharing Arrangement with Dealers (the “change in accounting estimate”).
  • The normalized Retail segment loss before income taxes was $11.6 million. Excluding the impact of a change in accounting estimate, the main factors affecting the Retail segment results were the anticipated lower Canadian Tire Retail Spring/Summer shipments, shipment delays relating to the distribution centre fire (“DC fire”), higher operating costs and a one-time cost to exit a supply chain contract.
  • Financial Services delivered income before income taxes of $118.7 million, down 5.3% against a strong 2022 result. Receivables growth of 10.4% and higher credit card sales growth, up 6.1%, drove an 11.5% increase in revenue, while higher net impairment losses and funding costs contributed to lower gross margin.
  • Since the beginning of 2023, the Company has continued to invest in its strategic differentiators as part of its Better Connected strategy, including:
    • Expanding the reach of the Triangle Rewards program and opportunities for engagement with our 11.4 million active members, including through the launch of the new Triangle Select subscription membership program, with more than 22,000 members signed up since the program’s January 2023 launch.
    • Continuing to steadily grow its portfolio of Owned Brands products, with the launch of the Stratus Owned Brand in the cycling category and the acquisition of plumbing faucets and fixtures brand Danze in Canada; Owned Brands accounted for 35.8% of Retail sales in Q1 2023.

To read the full results, visit the Canadian Tire website. 

Source: Cision News Wire
Source: Yahoo Finance
Source: Canadian Tire

The Home Depot Announces First Quarter Fiscal 2023 Results

Home Depot posted it worst revenue miss in about 20 years and lowers its forecast as consumers delay big projects. Colder weather and falling lumber prices hurt sales while CFO Richard McPhail said that customers are also buying fewer big-ticket items, such as patio sets and grills, and taking on smaller home improvement projects.

The Home Depot reported sales of $37.3 billion for the first quarter of fiscal 2023, a decrease of 4.2% from the first quarter of fiscal 2022. Comparable sales for the first quarter of fiscal 2023 decreased 4.5%, and comparable sales in the U.S. decreased 4.6%. 

Net earnings for the first quarter of fiscal 2023 were $3.9 billion, or $3.82 per diluted share, compared with net earnings of $4.2 billion, or $4.09 per diluted share, in the same period of fiscal 2022. 

“Given the negative impact to first quarter sales from lumber deflation and weather, further softening of demand relative to our expectations, and continued uncertainty regarding consumer demand, we are updating our guidance to reflect a range of potential outcomes,” said Richard McPhail, executive vice president and chief financial officer. 

The company is providing the following updated guidance for fiscal 2023:

  • Sales and comparable sales to decline between 2% and 5% compared to fiscal 2022
  • Operating margin rate to be between 14.3% and 14.0%
  • Tax rate of approximately 24.5%
  • Interest expense of approximately $1.8 billion
  • Diluted earnings-per-share-percent-decline between 7% and 13% compared to fiscal 2022

To view the full results, visit The Home Depot Website. Source: CNBC
Source: Home Depot