Canadian Tire Corp. Ltd. reported a ramp up in sales in its third quarter Thursday, when pandemic-inspired cooking, home improvement and staycations drove shoppers to the company's eponymous stores.
The chain, a fixture of Canada's retail landscape with products ranging from cookware and auto parts to tools and outdoor living, recorded a 25.7 per cent rise in sales compared with the same quarter in 2019.
While brick-and-mortar stores saw an increase in foot traffic and an expansion of curbside pickup services, the retailer also saw online sales growth of 178 per cent.
"With ongoing travel restrictions and limited entertainment options in Q3, families came to us to enable their creative summer vacation plans such as backyard staycations, camping and road trips," Canadian Tire president and CEO Greg Hicks told an investor call.
"This drove sales across all the seasonally relevant categories."
He said COVID-19 has also encouraged more one-stop shopping and a larger "basket size" as shoppers stock up to avoid multiple trips to the store.
"We believe that the macro trend with respect to the one-stop shop is here to stay, at least over the winter and while the pandemic is ongoing," Hicks said.
Indeed, he said the retailer is seeing strong momentum heading into its busiest sales period, despite scaling back some of its usual holiday promotions in order to maintain safe levels of traffic at stores.
"Believe it or not, Christmas sales are already quite strong," Hicks said. "And the early snow in the West drove our outerwear business at both Mark's and SportChek."
Canadian Tire is a family of businesses that includes financial services, real estate and retail – its best-known segment.
The company's brands include its Canadian Tire stores, sports equipment and clothing retailer SportChek, clothing store Mark’s, and sportswear and workwear brand Helly Hansen.
SportChek sales fell 1.7 per cent, which the company in part attributed to the restricted opening hours and lower foot traffic at the malls where more than half its stores are located.
The retailer also recorded softer back-to-school sales and a decline in demand for hockey and sports equipment due to the cancellation of many organized sports and activities. Sales were also negatively impacted by the decision to move bicycle inventory from SportChek to Canadian Tire stores in the second quarter.
Still, SportChek saw strong sales in categories related to outdoor recreation, such as hiking, camping, golf and fitness.
Meanwhile, the company said retail sales at Mark's stores rose 4.9 per cent compared with a year ago. Hicks said workwear has emerged as a "highly resilient" retail category during the pandemic.
Helly Hansen, based in Oslo, Norway, recorded a revenue drop of 2.5 per cent in the quarter.
Yet Helly Hansen remains focused on the future, Hicks said, noting that the subsidiary has signed partnerships to be the official apparel supplier for Canadian Ski Patrol members and the Norwegian national alpine ski team.
"These deals are a testament to Helly's status as the leading apparel brand for ski professionals and dedication to the development of high-performance apparel," he said.
The retailer raised its dividend as it reported higher profit and revenues, saying it will pay a quarterly dividend of $1.175 per share, up from $1.1375 per share.
The increased payment to shareholders came as Canadian Tire reported a profit attributable to shareholders of $296.3 million or $4.84 per diluted share, up from $197.2 million or $3.20 per diluted share a year ago.
Revenue totalled $3.99 billion, up from $3.64 billion.
Hicks called the company's third-quarter performance "a true testament to the relevancy of our brand and unique multi-category assortment."
On a normalized basis, Canadian Tire says it earned $4.93 per diluted share in its most recent quarter, up from $3.46 per diluted share in the third quarter of 2019.
This report by The Canadian Press was first published Nov. 5, 2020.
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