Canadian Tire Profit Falls Nearly 68% as Consumers Remain Wary Amid Uncertain Economy

Canadian Tire Corp. Ltd. reported its fourth-quarter profit and revenue fell compared with a year ago as it said it navigated a challenging economic environment. The retailer said it earned a profit attributable to shareholders of $172.5 million, or $3.09 per diluted share, for the 13-week period ended Dec. 30. 

Canadian Tire reported a 67.6% decline in net income in the quarter, which included the important holiday shopping season. Shoppers were reluctant to spend on unnecessary items such as Christmas décor, while a mild December dampened sales for everything from wiper blades to snowboards.

The company also reported that consolidated comparable sales were down 6.8% for the quarter. For the full year, comparable sales fell by 2.9%, or 3.1% excluding petroleum.

“Our performance last year fell short of our expectations as our team continues to navigate a challenging macroeconomic environment. In the face of significant headwinds, we remain agile and we are flexing across our multi-category portfolio with a focus on value and the essential categories Canadians need right now. The actions we have taken, particularly in the second half of 2023, are driving efficiencies and enabling us to prioritize key investments within our Better Connected strategy, including the continued rollout of our omnichannel initiatives,” said Greg Hicks, President and CEO, Canadian Tire Corporation. “In the near-term, we are taking a measured and cautious approach to our operating plans. While the pace of our investments has slowed, we remain committed to our strategy as we balance tough short-term decisions with our long-term objectives,” added Hicks.

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

Source: Globe and Mail
Source: Financial Post
Source: Canadian Tire


Costco Wholesale Corporation Reports January Sales Results

Costco Wholesale Corporation has reported net sales of $22.08 billion for the retail month of January, the five weeks ended February 4, 2024 an increase of 4.5% from $21.13 billion in 2023. For the 22 weeks ended February 4, 2024, the Company reported net sales of $104.94 billion, an increase of 6.0% from $99.00 billion for the 22 weeks of fiscal year 2023 ended January 29, 2023.

This year’s retail month of January had one less shopping day due to the timing of New Year’s Day. This negatively impacted total and comparable sales by approximately 3% to 3.5% percent.

To view the full results, visit the Costco website. 

Source: Costco


 

The Home Depot Announces Fourth Quarter and Fiscal 2023 Results

Home Depot said quarterly sales declined nearly 3% year over year, but it surpassed Wall Street’s earnings and revenue expectations despite the cooler demand.

On a call with CNBC, CFO Richard McPhail said demand dipped throughout the year as consumers returned to more typical spending patterns. He added that falling lumber prices and rising interest rates hurt the business. Home Depot now sees a chance to return to growth, McPhail said. “Our market is on its way back to normal demand conditions,” he said. “We’re not quite there yet, but the pressures we saw in 2023 are receding.”

The home improvement retailer said it expects total sales to grow about 1% in fiscal 2024, which includes an additional week. That compares with a 1.6% increase expected by Wall Street, according to StreetAccount. However, Home Depot said it expects comparable sales, which take out the effect of store openings and closures, to decline about 1% during a period without the additional week.

Home Depot anticipates it will open about a dozen new stores over the year. 

Here’s what the company reported for the three-month period that ended Jan. 28 compared with what Wall Street expected, based on a survey of analysts by LSEG, formerly Refinitiv:

  • Earnings per share: $2.82 vs. $2.77 expected
  • Revenue: $34.79 billion vs. $34.64 billion expected

Net income for the fiscal fourth quarter fell to $2.80 billion, or $2.82 per share, from $3.36 billion, or $3.30 per share, a year earlier. Net sales decreased from $35.83 billion in the year-ago period.

Slowdown from pandemic boom

Home Depot has faced a tougher sales backdrop over the past year. The home improvement retailer is following a more than two-year period when Americans had more time and money to spend on painting and fixing up their homes during the Covid-19 pandemic. 

About half of Home Depot’s business comes from home professionals and about half comes from do-it-yourself shoppers. Over the past year, McPhail and CEO Ted Decker described 2023 as “a year of moderation” after the outsize gains during the pandemic. Decker compared the pandemic to a “giant hurricane” that created an unusual period of demand.

Home Depot has also felt a pullback in consumer spending, particularly on big-ticket items, as some families postpone discretionary purchases because of inflation, put off buying a new home because of higher interest rates or choose to spend on experiences rather than goods. McPhail told CNBC that customers are still putting off bigger projects — especially the large-scale jobs that may require a loan — because of higher borrowing costs.  

Yet, he said sales throughout the fourth quarter were pretty consistent, except for a decline in January due to colder and wetter weather. He said that temporary drop did not factor into the company’s outlook for the year ahead. 

“The consumer is healthy and the consumer is engaged,” he said. “They’re just engaged at this point in smaller projects.”

Stable prices, but housing market headwinds

Average ticket and customer transactions both declined in the fourth quarter compared with the year-ago period. The average ticket dropped to $88.87 from $90.05 in the year-ago quarter, reflecting a more typical pricing environment, McPhail said.

Prices of items are lower than in 2023, a time when Home Depot and its suppliers dealt with higher costs of products and transportation rates, McPhail told CNBC. Since August, however, prices have remained steady. “Our observation is prices will likely remain at current levels for some time,” he said.

The housing market has complicated Home Depot’s outlook, too. Home Depot is “neutral on housing in the short term,” McPhail said.

Home values have skyrocketed more than 46% since 2019, he said, but turnover has dropped significantly. He said fewer moves have been “possibly offset by some level of improvement in place.”

To view the full results, visit the Home Depot website. 

Source: Home Depot
Source: Yahoo Finance
Source: CNBC


Walmart logo

 

Walmart Releases Q4 and FY24 Earnings

On February 20, 2024, Walmart Inc released its fourth quarter and full year financial results. The company reported a strong finish to the year, with significant growth in revenue and operating income, and a substantial increase in e-commerce sales, which now exceed $100 billion annually. Highlights are as follows:

  • Revenue Growth: Consolidated revenue increased by 5.7% to $173.4 billion in Q4 and 6.0% to $648.1 billion for the full year.
  • Operating Income: Q4 operating income jumped 30.4% to $1.7 billion; full year operating income rose 32.2% to $6.6 billion.
  • E-commerce Sales: Global e-commerce sales grew by 23%, with Walmart surpassing the $100 billion annual sales milestone.
  • Adjusted EPS: Q4 Adjusted EPS reached $1.80, excluding net gains from equity and other investments.
  • Dividend Increase: Walmart raises its annual dividend by 9%, reflecting confidence in its financial strength.
  • Free Cash Flow: FY24 free cash flow increased by $3.1 billion to $15.1 billion.
  • Strategic Acquisition: Walmart agrees to buy VIZIO HOLDING CORP. to bolster its Walmart Connect advertising platform.

The company’s omnichannel approach continues to resonate with customers, evidenced by a 4.0% increase in comparable sales for Walmart U.S. The growth in net sales and operating income is a testament to Walmart’s ability to adapt and thrive even in a challenging retail environment. However, the retail giant is not immune to the broader economic challenges, such as fluctuating consumer demand and the competitive landscape, which could impact future performance.

To view the full results, visit the Walmart website. 

Source: Walmart
Source: Yahoo Finance