- Diluted Earnings Per Share (EPS) was
$3.64 ; normalized diluted EPS grew$3.97 - Fourth consecutive quarter of exceptional Retail segment earnings, with normalized retail income before taxes up
$275.3 million - Consolidated revenue (excluding Petroleum) increased 20.4%, with Mark's and SportChek leading the growth and
Canadian Tire (CTR) up 15.7% - eCommerce sales grew 34% to
$856.7 million in the quarter, and surpassed$2.1 billion on a rolling 12-month basis
"I am pleased with our strong results, which clearly demonstrated our omni-channel capabilities and the growing customer connection to our brand. With a third of our stores impacted by closures, and many more subjected to restrictions during the quarter, our customers embraced our digital channels, driving eCommerce sales to record levels and doubling the volume of orders compared to last quarter," said
"We continued to grow our Triangle Rewards program, welcoming almost 600,000 new customers in the quarter, with active members up 11%," added Hicks.
HIGHLIGHTS
- Record quarterly eCommerce sales at
$856.7 million and$2.1 billion over the last 12 months - eCommerce contributed to the growth in revenue, with CTR experiencing the largest quarter in its history for eCommerce sales, up 63.2% to more than
$600 million - 8.8 million orders were fulfilled, double last quarter and up 38% compared to the second quarter last year
- Consolidated comparable sales (excluding Petroleum) were up 3.2% vs last year, and up 15.1% vs 2019
- A longer period of restrictions compared to last year at CTR had particular impact in
Ontario , which comprises 40% of the CTR store network, with stores closed for 70% of the quarter - CTR comparable sales were down 2.0% overall, with gardening, seasonal recreation, camping and automotive categories all growing double digits in the quarter. Compared to 2019, comparable sales were up 18.3%, with growth in over 70% of categories
- Comparable store sales at SportChek were up 28.6%, and Mark's up 43.2%, respectively, led by sales of athletic and industrial footwear and apparel. Compared to 2019, comparable sales were up 5.1% at SportChek and up slightly at Mark's
- Owned Brands penetration was 38% across the banners, representing close to
$1.6 billion of sales in the quarter, with growth coming fromRaleigh , Canvas, Diamondback andDenver Hayes - Strengthening engagement with Triangle Rewards members drove solid contributions
- Members accounted for 57% of retail sales, and average member spend was up 3%
- 33% of members shopped at more than one retail banner
- Triangle Rewards members reached 10.4 million, with almost 600,000 new members joining the program in the quarter and strengthened engagement efforts to retain existing members
- Our fourth consecutive quarter of strong retail segment earnings drove a significant increase in EPS and exceptional retail ROIC at 14.1%
- Retail segment normalized income before income taxes increased
$275.3 million , reflecting: - Retail revenue (excluding Petroleum) growth of 23.4%, fuelled by revenue growth at all banners led by shipment growth at CTR
- Gross margin rate (excluding Petroleum) increased 425 bps, up across all banners led by CTR
- Operating leverage improved, with normalized SG&A expenses (excluding Petroleum) as a percentage of revenue improving by over 200 bps
- Financial Services income before income taxes grew by
$74.3 million , or 145.7%, in the quarter, reflecting: - Strong portfolio risk and customer metrics
- A year-over-year improvement in gross margin due mainly to a
$31.2 million reduction in the allowance for loans receivable compared to an incremental allowance in the prior year
CONSOLIDATED OVERVIEW
- Consolidated retail sales increased
$506.9 million in the second quarter, or 11.6% over the same period in 2020. Excluding Petroleum, consolidated retail sales were up 8.2% over the same period last year - Consolidated revenue increased
$756.7 million , or 23.9% in the second quarter. Excluding Petroleum, consolidated revenue increased 20.4% - Diluted EPS was
$3.64 in the quarter, up$3.97 per share compared to the prior year. Normalized diluted EPS in the quarter was$3.72 , an increase of$3.97 per share - Refer to the Q2 2021 MD&A section 3.1.1 for information on normalizing items and for additional details on events that have impacted the Company in the quarter
RETAIL SEGMENT OVERVIEW
- Retail segment revenue increased
$773.4 million , or 27.1%. Excluding Petroleum, Retail segment revenue increased 23.4% over the same period last year - CTR retail sales increased 1.9% and comparable sales were down 2.0%
- SportChek retail sales were up 39.8% and comparable sales were up 28.6%
- Mark's retail sales increased 58.0% and comparable sales were up 43.2%
- Helly Hansen external revenue was
$100.6 million , up 45.9% - Income before income taxes increased
$274.8 million over the same period in 2020. Normalized income before income taxes increased$275.3 million - Refer to the Q2 2021 MD&A section 3.1.1 for information on normalizing items and for additional details on events that have impacted the Company in the quarter
FINANCIAL SERVICES OVERVIEW
- The Financial Services business has continued to perform well through the pandemic as demonstrated by a number of key metrics, including sales, customer payments and delinquency rates
- Lower outstanding receivables, consistent with industry trends, resulted in a decline in revenue of 4.5% in the quarter
- Gross margin improved
$86.8 million or 68.8% compared to the same period in 2020, primarily due to lower net impairment costs which reflected a$31.0 million reduction to the allowance for loans receivable and lower net write offs - Income before income taxes increased
$74.3 million , or 145.7% over the same period last year - Refer to the Q2 2021 MD&A section 3.1.1 for additional details on events that have impacted the Company in the quarter
CT REIT OVERVIEW
- CT REIT delivered 8.2% growth in Adjusted Funds From Operations (AFFO) per unit in the second quarter
- CT REIT announced five new investments, which will require an estimated total investment of
$60.3 million to complete, adding approximately 266,000 square feet of incremental gross leasable area to the portfolio upon completion - For further information, refer to the Q2
2021 CT REIT earnings release issuedAugust 9, 2021
CAPITAL ALLOCATION
CAPITAL EXPENDITURES
- Operating capital expenditures were
$128.8 million in the quarter, up from$52.0 million in the second quarter of 2020 - Total capital expenditures were
$184.6 million in the quarter, an increase of$113.2 million
QUARTERLY DIVIDEND
- On
August 11, 2021 , the Company's Board of Directors declared dividends payable to holders of Class A Non-Voting Shares and Common Shares at a rate of$1.175 per share payable onDecember 1 to shareholders of record as ofOctober 31 . The dividend is considered an "eligible dividend" for tax purposes
NORMAL COURSE ISSUER BID
- The Company intends to continue to purchase Shares under the 2021-22 NCIB to offset the dilutive effect of the issuance of Shares pursuant to its dividend reinvestment and stock option plans, consistent with the Company's policy. The Company retains the flexibility to purchase additional Shares beyond its anti-dilutive requirements but does not intend to do so at this time
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FORWARD-LOOKING STATEMENTS
Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements are being provided for the purposes of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our anticipated financial position, results of operations and operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Although CTC believes that the forward-looking information in this press release is based on information, assumptions and beliefs which are current, reasonable and complete, this information is necessarily subject to a number of factors, risks and uncertainties, including as a result of COVID-19, that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking information. For more information on the risks, uncertainties and assumptions that could cause the CTC's actual results to differ from current expectations, refer to section 10.0 (Key Risks and Risk Management) of our Management's Discussion and Analysis for the year ended
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