Canadian Tire revenue falls as demand for sporting, home items slow

Canadian Tire

10/08/2023 11:52

Aug 10 (Reuters) - Canadian Tire Corp  CTCa.TO  on
Thursday reported a drop in quarterly revenue, as demand for
sporting goods and home improvement items slowed at its retail
stores.
    Higher costs of food and gas, despite a drop in the annual
inflation rate in Canada, have led to tepid customer-spend on
higher-priced discretionary items such as sportswear and
gardening equipment.
    The Toronto-based retailer, which has also battled supply
chain issues after a fire at its A.J. Billes distribution centre
in March, said consumers have shifted to purchasing more
essentials and discounted offerings at its stores. 
    Retail segment revenue fell 4.2% from a year ago, with the
company saying that consumer spending softened in the latter
part of the quarter. Retail sales declined at its Mark's and
SportCheck stores as demand for athletic clothing and casual
wear slowed.
    Still, consolidated comparable sales grew 0.1% in the second
quarter ended July 1, as sales at its loyalty program Triangle
Rewards rose 80 basis points as a percentage of retail sales and
outperformed non-member spend.
    Revenue in the reported quarter fell 3.4% to C$4.26 billion
($3.18 billion), from C$4.40 billion ($3.28 billion) a year ago.
The average of five analysts was C$4.26 billion, according to
Refinitiv data. 
    Adjusted net income fell to C$206.5 million from C$218.2
million a year ago. The company reported adjusted earnings per
share of C$3.08, while analysts expected C$3.09 per share.   
    The retailer said it was withdrawing its previously
disclosed financial targets for 2022-2025 as it battles high
inventory costs and strained consumer spend.
    

($1 = 1.3402 Canadian dollars)

 (Reporting by Juveria Tabassum in Bengaluru; Editing by
Shailesh Kuber)
 ((Juveria.Tabassum@thomsonreuters.com;))