Canadian Tire revenue down in first quarter as consumer spending softens

"The increased cost of living combined with higher interest rates has created a period of hesitation among Canadian consumers," president and CEO Greg Hicks told analysts during a conference call Thursday.

"This has had an obvious impact on our operations," he added.

The retailer on Thursday reported its first-quarter profit rose compared with a year ago even as its revenue fell about five per cent. Its net income attributable to shareholders totalled $76.8 million or $1.38 per diluted share for the quarter ended March 30, the company said in a release.

The result was up from a profit of $7.8 million or 13 cents per diluted share in the same quarter last year when it was hit by costs related to a warehouse fire.

Canadian Tire says its normalized profit amounted to $1.38 per diluted share in its latest quarter, up from a normalized profit of $1 per diluted share in the same quarter last year.

Revenue for the quarter totalled $3.52 billion, down from $3.71 billion in the same period last year.

Consolidated comparable sales fell 1.6 per cent as fewer people shopped at retail stores amid high interest rates and inflationary pressures.

Same-store sales at Canadian Tire retail were down 0.6 per cent, compared to 4.8 per cent decline at the same time last year.

Mark's and SportChek same-store sales also fell, in line with overall consumer sentiments on discretionary spending.

At Mark's comparable sales were down 1.2 per cent, while SportChek dropped 6.5 per cent in same-store sales.

Hicks said potential interest rate cuts "could foster stability, easing uncertainties in our business operations."

The Bank of Canada has been closely watching economic data — including consumer spending — as waits for the right time to begin lowering interest rates. Its next decision is scheduled for June 5.

This report by The Canadian Press was first published May 9, 2024.

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