Canadian Tire misses quarterly estimates as demand wanes from pandemic high

·1 min read
The Canadian Tire logo is seen in Ottawa

(Reuters) - Retailer Canadian Tire Corp Ltd missed market expectations for quarterly profit and revenue on Thursday, as consumers spent less on home furnishings and indoor supplies over the summer.

As pandemic-related restrictions eased, Canadians have redirected their attention back to outdoor activities, away from the home-related items they splurged on last summer while they took up new hobbies and revamped their living spaces.

While shoppers returned to the 99-year-old retailer's SportChek and Mark's stores, its online business, which had thrived during the lockdowns, took a beating.

E-commerce sales in Canadian Tire's retail segment fell 2.2% in the third quarter.

Similar to other retailers, Canadian Tire has been spending more to stock up its shelves ahead of the crucial holiday shopping season, as it grapples with increased commodity inflation and rising freight costs.

Chief Executive Greg Hicks said the company was well-positioned to meet the holiday demand, citing its strong inventory.

The company also raised its annual dividend by 10.6% to C$5.20 per share, and resumed its share repurchase plan with a view to buying back up to C$400 million Class A shares by the end of 2022.

The Toronto, Ontario-based retailer's revenue fell 1.8% to C$3.91 billion ($3.11 billion) in the quarter ended Oct. 2, missing analysts' estimate of C$3.97 billion, according to Refinitiv IBES.

Excluding items, Canadian Tire earned C$4.20 per share, falling short of estimates of a C$4.30 profit.

($1 = 1.2562 Canadian dollars)

(Reporting by Deborah Sophia in Bengaluru; Editing by Krishna Chandra Eluri)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting