Canadian Tire lays off 3% of full-time employees, misses profit estimates (updated)

Canadian Tire

09/11/2023 20:29

(Adds number of affected employees in paragraph 4)
       Nov 9 (Reuters) - Canadian Tire  CTCa.TO  said on
Thursday it had laid off 3% of its full-time employees, in an
effort to lower costs amid slowing demand due to persisting
inflation.
    The Toronto-based retailer joins a list of companies that
have been reducing their workforce over the past year as they
battle higher interest rates as well as costs linked to labor
and supply chain.
    Canadian Tire said it expects an annualized run-rate savings
of about C$50 million ($36.31 million) as a result of the
headcount reduction. But it also expects to take a charge of
between C$20.0 million and C$25.0 million in the fourth quarter
in relation to these actions.
    The job cuts amount to a reduction of roughly 200 employees,
the company said.
        It also reported a 1.6% drop in consolidated comparable
sales as customers continue to shift to essentials and cut back
on purchasing discretionary items such as athletic footwear and
clothing.
    Canadian Tire, whose shares were down 2% in afternoon
trading, reported adjusted profit of C$2.96 per share, below
LSEG estimates of C$3.29 per share.
    It, however, beat third-quarter revenue expectations, as
well as announced an additional C$200.0 million share repurchase
program.
    Late in October, Canadian Tire had said it was reviewing
alternatives for its financial services arm and had bought back
Scotiabank's  BNS.TO  20% stake in the unit in a cash
transaction valued at C$895 million.

($1 = 1.3771 Canadian dollars)

 (Reporting by Granth Vanaik in Bengaluru; Editing by Shilpi
Majumdar)
 ((Granth.Vanaik@thomsonreuters.com | X : https://twitter.com/Vanaik_Granth;))