Canada NewsWire
TORONTO, Nov. 10, 2022
TORONTO, Nov. 10, 2022 /CNW/ - Canadian Tire Corporation, Limited (TSX: CTC) (TSX: CTC.A) ("CTC" or the "Company") today released its third quarter results for the period ended October 1, 2022.
"In the third quarter, we effectively engaged our loyalty customers, resulting in increased spending per Triangle Member, with total loyalty sales outpacing non-member sales – a trend we expect to continue," said Greg Hicks, President and CEO, Canadian Tire Corporation. "We remain committed to the strategic growth investments we laid out as part of our Better Connected strategy, and in the near-term, we will face into changing customer demand and a dynamic economic environment with the confidence that our multi-category assortment is well-positioned to meet our customer needs."
"Throughout its long history, Canadian Tire Corporation has consistently demonstrated the underlying strength and resilience of its business and its ability to deliver steady growth and returns to its shareholders," said Hicks.
THIRD QUARTER HIGHLIGHTS
CONSOLIDATED OVERVIEW
RETAIL SEGMENT OVERVIEW
FINANCIAL SERVICES OVERVIEW
CT REIT OVERVIEW
CAPITAL ALLOCATION
CAPITAL EXPENDITURES
QUARTERLY DIVIDEND
SHARE REPURCHASES
(1) NON-GAAP FINANCIAL MEASURES AND RATIOS AND SUPPLEMENTARY FINANCIAL MEASURES
This press release contains non-GAAP financial measures and ratios and supplementary financial measures. References below to the Q3 2022 MD&A mean the Company's Management's Discussion and Analysis for the Third Quarter 2022 for the 39 weeks ended October 1, 2022, which is available on SEDAR at www.sedar.com and is incorporated by reference herein. Non-GAAP measures and non-GAAP ratios have no standardized meanings under GAAP and may not be comparable to similar measures of other companies.
(A) Non-GAAP Financial Measures and Ratios
Normalized Diluted Earnings per Share (EPS)
Normalized diluted EPS, a non-GAAP ratio, is calculated by dividing Normalized Net Income Attributable to Shareholders, a non-GAAP financial measure, by total diluted shares of the Company. For information about these measures, see section 9.1 of the Company's Q3 2022 MD&A.
The following table is a reconciliation of normalized net income attributable to shareholders of the Company to the respective GAAP measures:
YTD | YTD | |||||||
(C$ in millions) | Q3 2022 | Q3 2021 | Q3 2022 | Q3 2021 | ||||
Net income | $ | 225.0 | $ | 279.5 | $ | 620.2 | $ | 725.0 |
Net income attributable to shareholders | 184.9 | 243.7 | 512.2 | 619.1 | ||||
Add normalizing items: | ||||||||
Operational Efficiency program | $ | 11.6 | $ | 13.9 | $ | 20.3 | $ | 25.3 |
Helly Hansen Russia exit | — | — | 33.4 | — | ||||
Normalized net income | $ | 236.6 | $ | 293.4 | $ | 673.9 | $ | 750.3 |
Normalized net income attributable to shareholders | 196.5 | $ | 257.6 | $ | 565.9 | $ | 644.4 | |
Normalized diluted EPS | $ | 3.34 | $ | 4.20 | 9.49 | $ | 10.49 |
Consolidated Normalized Income Before Income Taxes and Retail Normalized Income Before Income Taxes
Consolidated Normalized Income Before Income Taxes and Retail Normalized Income before Income Taxes are non-GAAP financial measures. For information about these measures, see section 9.1 of the Company's Q3 2022 MD&A.
The following table reconciles Consolidated Normalized Income Before Income Taxes to Income Before Income Taxes:
YTD | YTD | |||||||
(C$ in millions) | Q3 2022 | Q3 2021 | Q3 2022 | Q3 2021 | ||||
Income before income taxes | $ | 298.6 | $ | 369.9 | $ | 831.6 | $ | 981.9 |
Add normalizing items: | ||||||||
Operational Efficiency program | 15.8 | 18.9 | 27.6 | 34.4 | ||||
Helly Hansen Russia exit | — | — | 36.5 | — | ||||
Normalized income before income taxes | $ | 314.4 | $ | 388.8 | $ | 895.7 | $ | 1,016.3 |
The following table reconciles Retail Normalized Income Before Income Taxes to Retail Income Before Income Taxes:
YTD | YTD | ||||||||
(C$ in millions) | Q3 2022 | Q3 2021 | Q3 2022 | Q3 2021 | |||||
Income before income taxes | $ | 298.6 | $ | 369.9 | $ | 831.6 | $ | 981.9 | |
Less: Other operating segments | 165.6 | 143.4 | 426.0 | 444.3 | |||||
Retail income before income taxes | $ | 133.0 | $ | 226.5 | $ | 405.6 | $ | 537.6 | |
Add normalizing items: | |||||||||
Operational Efficiency program | 15.8 | 18.9 | 27.6 | 34.4 | |||||
Helly Hansen Russia exit | — | — | 36.5 | — | |||||
Retail normalized income before income taxes | $ | 148.8 | $ | 245.4 | $ | 469.7 | $ | 572.0 |
Retail Return on Invested Capital
Retail Return on Invested Capital (ROIC) is calculated as Retail return divided by the Retail invested capital. Retail return is defined as trailing annual Retail after-tax earnings excluding interest expense, lease related depreciation expense, inter-segment earnings, and any normalizing items. Retail invested capital is defined as Retail segment total assets, less Retail segment trade payables and accrued liabilities and inter-segment balances based on an average of the trailing four quarters. Retail return and Retail invested capital are non-GAAP financial measures. For more information about these measures, see section 9.1 of the Company's Q3 2022 MD&A.
Rolling 12 months ended | ||||
(C$ in millions) | Q3 2022 | Q3 2021 | ||
Income before income taxes | $ | 1,551.6 | $ | 1,700.5 |
Less: Other operating segments | 507.9 | 584.9 | ||
Retail income before income taxes | $ | 1,043.7 | $ | 1,115.6 |
Add normalizing items: | ||||
Operational Efficiency program | 34.1 | 69.6 | ||
Helly Hansen Russia exit | 36.5 | — | ||
Retail normalized income before income taxes | $ | 1,114.3 | $ | 1,185.2 |
Less: | ||||
Retail intercompany adjustments1 | 203.5 | 194.7 | ||
Add: | ||||
Retail interest expense2 | 238.5 | 259.2 | ||
Retail depreciation of right-of-use assets | 574.8 | 535.1 | ||
Retail effective tax rate | 26.7 % | 28.2 % | ||
Add: Retail taxes | (459.8) | (503.4) | ||
Retail return | $ | 1,264.3 | $ | 1,281.4 |
Average total assets | $ | 21,633.1 | $ | 21,007.8 |
Less: Average assets in other operating segments | 4,590.2 | 4,870.9 | ||
Average Retail assets | $ | 17,042.9 | $ | 16,136.9 |
Less: | ||||
Average Retail intercompany adjustments1 | 3,521.4 | 3,415.3 | ||
Average Retail trade payables and accrued liabilities3 | 2,855.2 | 2,439.2 | ||
Average Franchise Trust assets | 446.2 | 527.4 | ||
Average Retail excess cash | 114.4 | 67.1 | ||
Average Retail invested capital | $ | 10,105.7 | $ | 9,687.9 |
Retail ROIC | 12.5 % | 13.2 % |
1 | Intercompany adjustments include intercompany income received from CT REIT which is included in the Retail segment, and intercompany investments made by the Retail segment in CT REIT and CTFS. |
2 | Excludes Franchise Trust. |
3 | Trade payables and accrued liabilities include trade and other payables, short-term derivative liabilities, short-term provisions and income tax payables. |
Operating Capital Expenditures
Operating capital expenditures is a non-GAAP financial measure. For more information about this measure, see section 9.1 of the Company's Q3 2022 MD&A.
The following table reconciles total additions from the Investing activities reported in the Consolidated Statement of Cash Flows to Operating capital expenditures:
YTD | YTD | |||
(C$ in millions) | Q3 2022 | Q3 2021 | ||
Total additions1 | $ | 539.3 | $ | 435.3 |
Add: Accrued additions | 34.9 | 45.5 | ||
Less: | ||||
Business combinations, intellectual properties and tenant allowances | — | (14.3) | ||
CT REIT acquisitions and developments excluding vend-ins from CTC | 60.2 | 46.2 | ||
Operating capital expenditures | $ | 514.0 | $ | 448.9 |
1 This line appears on the Consolidated Statement of Cash Flows under Investing activities. |
(B) Supplementary Financial Measures and Ratios
The measures below are supplementary financial measures. See Section 9.2 (Supplementary Financial Measures) of the Company's Q3 2022 MD&A for information on the composition of these measures.
To view a PDF version of Canadian Tire Corporation's full quarterly earnings report please see: https://mma.prnewswire.com/media/1943423/CANADIAN_TIRE_CORPORATION__LIMITED_Canadian_Tire_Corporation_Rep.pdf
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 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 CTC's actual results to differ from current expectations, refer to section 10.0 (Key Risks and Risk Management) of the Company's Q3 2022 MD&A as well as CTC's other public filings, available at www.sedar.com and at https://investors.canadiantire.ca. CTC does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf to reflect new information, future events or otherwise, except as is required by applicable securities laws.
CONFERENCE CALL
Canadian Tire will conduct a conference call to discuss information included in this news release and related matters at 8:00 a.m. ET on November 10, 2022. The conference call will be available simultaneously and in its entirety to all interested investors and the news media through a webcast at https://investors.canadiantire.ca and will be available through replay at this website for 12 months.
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 more than 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.
FOR MORE INFORMATION
Media: Jane Shaw, (416) 480-8581, [email protected]
Investors: Karen Keyes, (647) 518-4461, [email protected]
SOURCE CANADIAN TIRE CORPORATION, LIMITED
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