Canadian Tire Corporation Reports Strong Full-Year and Fourth Quarter 2024 Results

Canadian Tire Corporation, Limited (CTC or the Company) announced results for its fourth quarter and full year ended December 28, 2024.

• Strong December sales drove a return to comparable sales growth in Q4.
• Triangle spend per member was up in Q4, as members earned and redeemed at higher levels than last year.
• Q4 Diluted Earnings Per Share (EPS) was $7.37; Q4 Normalized Diluted EPS was up 20.4% to $4.07.
• Full-year Diluted EPS was $15.92; Full-Year Normalized Diluted EPS¹ was up 21.7% to $12.62.

“In the quarter, we charted strong earnings and a return to growth, while observing economic green shoots like improved consumer sentiment and spending,” said Greg Hicks, President and CEO, Canadian Tire Corporation. “The strength of Triangle Rewards was on display in Q4, as loyalty sales grew 4% and we activated more personalized promotions – having attracted and engaged nearly half-a-million new and returned members in 2024.

“As we look beyond our Better Connected strategy, we have growing evidence and conviction that a deeper connection of our retail banners and our loyalty system drives higher member engagement and sales.”

Fourth-Quarter Highlights

• Consolidated comparable sales¹ and consolidated retail sales returned to growth and were both up 1.1%, driven by strong December sales across all banners; loyalty sales¹ were up 4%.
  • Canadian Tire Retail (CTR) comparable sales¹ grew 1.1%. Strong growth was led by Automotive and offset by modest declines across other divisions. Essential categories were up 4%, while consumer demand remained constrained in discretionary categories, which were down 2%.
  • SportChek comparable sales¹ were up for a second consecutive quarter, with growth of 0.4% driven by strong franchise sales. Hockey, hydration, and lifestyle footwear were top performing categories in the quarter.
  • Mark’s comparable sales¹ were up 1.8%, as the industrial businesses returned to growth and new store openings drove broad-based growth across Mark’s categories.
• Consolidated income before income taxes (IBT) was $529.1 million, up $266.1 million. Normalized IBT¹ was up $39.7 million or 13.9% to $324.3 million. Improved retail segment profitability drove the increase.
  • Retail IBT was $436.7 million, up $275.0 million or $41.2 million on a normalized basis¹, driven by favourable gross margin dollars as a result of higher revenue, lower operating expenses, and lower net finance costs.
  • Financial Services IBT was down $17.7 million, or down $10.3 million on a normalized basis after accounting for costs related to the recently-completed strategic review and targeted headcount reduction in the prior year. Expected increases in net impairment losses, as well as higher funding costs, drove the remainder of the decline.

Full-Year Highlights

• Consolidated retail and comparable sales, excluding Petroleum¹, were down 1.7%, reflecting a weaker consumer demand environment. At CTR, essential categories were up 1%, led by Automotive, and outpaced the 5% decline in discretionary categories.
• Loyalty sales penetration¹ represented 54.4% of full-year retail sales on a direct scan basis, growing the amount of electronic Canadian Tire Money (eCTM) in the ecosystem and driving redemption to create more value for Triangle members. Canadians redeemed $360 million of eCTM in 2024, up 7%.
• Delivering an improved Retail gross margin rate, excluding Petroleum¹, up 50 bps to 36.0%, and maintaining operating expense discipline contributed to improved Retail segment profitability and Retail Return on Invested Capital¹ (ROIC) at 9.4%. Normalized Retail IBT was $558.0 million, up 27.4%; Retail IBT was $772.2 million, including the gain on the sale of a Brampton industrial property completed in December 2024.
• Continued sell through of existing inventory, partially offset by investments in newer retail inventory ahead of 2025, resulted in year-end inventory down 5% compared to year-end 2023. Working capital improvements contributed to strong retail cash generated from operating activities¹ of close to $1.7 billion, compared to $1.1 billion in 2023. At the end of Q4, CTC had fully repaid the $895 million of borrowings associated with its October 2023 repurchase of 20% of the Canadian Tire Financial Services business.

Strategic Highlights

• Since 2022, the Company has been executing its Better Connected strategy, modernizing core retail foundational elements by investing in the business, with total Operating Capital Expenditures¹ of $1.8 billion. Over that time, the Company has also returned $1.9 billion to shareholders, by way of share repurchases and dividends paid.
• The third year of the Company’s Better Connected strategy has seen CTC:
  • Roll out further CTR store investment projects, with close to a quarter of the Company’s 502 CTR stores updated since 2022. Combined with new store formats and refreshed stores at other banners, CTC has added an incremental ~1 million of retail square feet across its banners over the same period. The Company also drove value by monetizing redundant real estate assets during 2024.
  • Bolster its digital capabilities, better connecting digital and physical channels and supporting $1.1 billion of annual eCommerce sales¹. These enhancements have contributed to an enhanced customer experience, as demonstrated by improved customer Net Promoter Scores (NPS).
  • Continue to strengthen the Owned Brands portfolio across our banners, growing and elevating our largest brands such as MotoMaster, which delivered double-digit growth in 2024. Since 2022, an additional three brands have achieved annual sales of over $100 million, taking the total to 17. Owned Brands continued to deliver a significant margin differential vis-à-vis National Brands. Customer attachment to these brands remains strong.
  • Grow the base of active registered Triangle members from 7.8 million at the end of 2021 to 9.2 million at the end of 2024. Direct scan Loyalty Penetration¹ is up by 480 bps, delivering even stronger first-party data on which to build.
  • Continue to transform its supply chain network and invest in IT network modernization and resilience. Supply chain investments included optimized capacity utilization and automated fulfilment at existing Distribution Centres (DC) and regional capacity expansion in Western Canada with a new DC in Metro Vancouver, set to open in 2025.

Consolidated Overview

Fourth Quarter

• Revenue was $4,507.3 million, up 1.5% compared to $4,443.0 million in the same period last year; Revenue (excluding Petroleum)¹ was $4,002.6 million, an increase of 1.6% compared to the prior year.
• Consolidated IBT was $529.1 million, up $266.1 million compared to the prior year. On a normalized basis, consolidated IBT was up $39.7 million.
• Diluted EPS was $7.37 or $4.07 on a normalized basis, compared to $3.09 or $3.38 on a normalized basis in the prior year.
• Refer to the Company’s Q4 2024 MD&A section 5.1.1 for information on normalizing items and additional details on events that have impacted the Company in the quarter.

Full Year

• Consolidated retail sales were $18,177.7 million, down $326.4 million, or 1.8% over the prior year. Consolidated retail sales, excluding Petroleum, decreased 1.7% and consolidated comparable sales were down 1.7%.
• Consolidated Revenue decreased 1.8% to $16,357.8 million; Revenue (excluding Petroleum) decreased 1.7% compared to the same period last year, with the decline in the Retail segment partially offset by Financial Services growth.
• Consolidated IBT was $1,246.0 million and $1,041.2 million on a normalized basis, with increases in normalized IBT primarily due to higher Retail segment earnings.
• Diluted EPS was $15.92, compared to $3.78 in the prior year. Normalized diluted EPS was $12.62, an increase of 21.7% year-over-year compared to $10.37 on a normalized basis in the prior year.
• Refer to the Company’s Q4 2024 MD&A section 5.1.1 for information on normalizing items and for additional details on events that have impacted the Company in the year.

Retail Segment Overview

Fourth Quarter

• Retail sales¹ were $5,380.5 million, up 1.1%, compared to the fourth quarter of 2023; Retail sales (excluding Petroleum)¹ were up 1.2%. Consolidated comparable sales were up 1.1%.
• CTR retail sales¹ were up 1.3% and comparable sales were up 1.1% over the same period last year.
• SportChek retail sales¹ increased 0.2% over the same period last year, and comparable sales were up 0.4%.
• Mark’s retail sales¹ increased 2.4% over the same period last year, and comparable sales were up 1.8%.
• Helly Hansen revenue was up 11.9% compared to the same period in 2023.
• Retail revenue was $4,123.2 million, an increase of $53.2 million, or 1.3%, compared to the prior year; Retail revenue (excluding Petroleum)¹ was up 1.4 %.
• Retail gross margin was $1,336.8 million, down 0.1% compared to the fourth quarter of the prior year, and down 0.1% excluding Petroleum¹. Normalized Retail gross margin increased by $16.1 million. Retail gross margin rate (excluding Petroleum) decreased 56 bps to 35.5% or 7 bps on a normalized basis to 36.0%.
• Retail IBT was $436.7 million in Q4 2024 or $222.5 million on a normalized basis, compared to $161.7 million or $181.3 million on a normalized basis in the prior year.
• ROIC calculated on a trailing twelve-month basis was 9.4% at the end of the fourth quarter of 2024, compared to 7.9% at the end of the fourth quarter of 2023, due to the increase in earnings over the prior period.
• Refer to the Company’s Q4 2024 MD&A sections 5.2.1 for information on normalizing items and additional details on events that have impacted the Retail segment in the quarter.

Financial Services Overview

Fourth Quarter

• Normalized Financial Services IBT was $76.9 million, compared to $87.2 million in the prior year, after normalizing for costs associated with the strategic review in 2024 and costs associated with targeted headcount reduction in 2023. On a reported basis, Financial Services segment IBT was $67.5 million in the quarter, a $17.7 million decrease from the prior year.
• Revenue was up 2.4%, but gross margin was lower, due to the expected increase in net write-offs compared to the same quarter last year.
• Gross Average Accounts Receivable¹ (GAAR) was up 2.3%, compared to Q4 last year. Strong cardholder engagement was reflected in higher card spend, particularly through December, adding to average account balances¹, which were up 2.6%.
• Refer to the Company’s Q4 2024 MD&A section 5.3.1 and 5.3.2 for additional details on events that have impacted the Financial Services segment in the quarter.

CT Reit Overview

Fourth Quarter and Full Year

• Diluted Adjusted Funds from Operations¹ (AFFO) per unit was up 1.7% compared to Q4 2023; diluted net income per unit was $0.452, compared to $0.161 in Q4 2023.
• CT REIT announced three new investments totalling $59 million, which are expected to add approximately 284,000 square feet of incremental gross leasable area upon completion.
• For further information, refer to the Q4 2024 CT REIT earnings release issued on February 10, 2025.

Capital Allocation

Capital Expenditures

• Total capital expenditures were $575.1 million in 2024, compared to $683.4 million in 2023.
• Operating capital expenditures were $478.4 million in 2024, compared to $615.3 million in 2023, in line with the Company’s previously disclosed range of $475.0 million to $525.0 million.
• 2025 operating capital expenditures are expected to be in the range of $525 million to $575 million.

Quarterly Dividend

• On February 12, 2025, the Company’s Board of Directors declared a dividend of $1.775 per Common and Class A Non-Voting Share, payable on June 1, 2025, to shareholders of record as of April 30, 2025. The dividend is considered an “eligible dividend” for tax purposes.

Share Repurchases

• On November 7, 2024, the Company announced its intention to repurchase up to $200 million of its Class A Non-Voting Shares, in excess of the amount required for anti-dilutive purposes, in 2025.
• Repurchases of Class A Non-Voting Shares will be made under the Company’s existing Normal Course Issuer Bid (NCIB), which expires on March 1, 2025, and thereafter under a renewed NCIB and automatic securities purchase plan, subject to regulatory approvals.

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About Canadian Tire Corporation

Canadian Tire Corporation, Limited, (TSX: CTC.A) (TSX: CTC) (or CTC), is a group of companies that includes a Retail segment, a Financial Services division and CT REIT. Our retail business is led by Canadian Tire, which was founded in 1922 and provides Canadians with products for life in Canada across its Living, Playing, Fixing, Automotive and Seasonal & Gardening divisions. Party City, PartSource and Gas+ are key parts of the Canadian Tire network. The Retail segment also includes Mark’s, a leading source for casual and industrial wear; Pro Hockey Life, a hockey specialty store catering to elite players; and SportChek, Hockey Experts, Sports Experts and Atmosphere, which offer the best active wear brands. The Company’s close to 1,700 retail and gasoline outlets are supported and strengthened by CTC’s Financial Services division and the tens of thousands of people employed across Canada and around the world by CTC and its local dealers, franchisees and petroleum retailers. In addition, CTC owns and operates Helly Hansen, a leading technical outdoor brand based in Oslo, Norway. For more information, visit Corp.CanadianTire.ca.

Contact:

Stephanie Nadalin – Media – stephanie.nadalin@cantire.com – (647) 271-7343

Source: Canadian Tire Corporation Limited