Canadian Tire Corp Ltd on Thursday reported a quarterly loss compared with a year-ago profit, as its stores remained closed due to COVID-19 lockdowns across the country and it put aside more money to brace for a raft of potential defaults in its financial services business.
The company limited service to curbside pick-ups and home deliveries at its 203 namesake stores in Ontario and closed its other units such as Mark's and SportChek, following government orders.
However, it struggled to keep its online services running amid a surge in orders, leaving its website inaccessible for many customers who were asked to place requests only over the phone. Comparable sales declined 0.3% for the quarter, even as online sales surged 80% in Canadian Tire stores and 44% overall.
Chief Executive Officer Greg Hicks said the company had seen a "quantum leap" in e-commerce performance across all its banners and has poured more money into digital capabilities.
On a call with analysts, Hicks said the rise in online sales still did not compensate for the loss of foot traffic in closed stores.
Canadian Tire's financial services unit, which operates its credit card business and offers cashback at its stores and gas stations, reported a 22.2% fall in gross margin due to a C$44.9 million rise in expected credit loss.
Excluding one-time items, the company reported a loss of 13 Canadian cents per share.
Revenue fell 1.6% to C$2.85 billion.
Net income fell to C$12.2 million ($8.67 million)in the quarter, from C$97.4 million, a year earlier
On a per-share basis, the company reported a loss of 22 Canadian cents per share, compared with a profit of C$1.12 per share a year earlier.
(This story corrects to remove reference to Refinitiv estimates in headline, paragraph 1, 7 and 8).
(Reporting by Nivedita Balu in Bengaluru; Editing by Ramakrishnan M.)