Canadian Tire sees resilient spending despite profit drop and tariff worries, says CEO Greg Hicks
Canadian Tire Corp. Ltd. customers appear to be handling tariff-related price pressures better than expected, according to CEO Greg Hicks.
According to BNN Bloomberg, Hicks said Thursday that despite earlier concerns, shoppers across the company’s banners — including Canadian Tire, SportChek, Party City, Mark’s, and Pro Hockey Life — have maintained steady spending patterns.
“Despite low confidence levels, customers have been and remain more resilient than we anticipated,” Hicks said during a call with analysts.
He added that communities tied to auto manufacturing — a sector affected by tariffs — are showing “no clear signs of softness.”
Canadian Tire has observed “healthy” spending across all income levels it tracks, with an eight percent increase in spending on essentials and a one percent rise in discretionary purchases — the first such gain in three years.
Hicks’s updated outlook contrasted with his earlier remarks in February, when he expressed concern that tariffs threatened by US President Donald Trump could “substantially erase signs of an economic rebound.”
Trump has since followed through on several of those threats, applying tariffs on steel, aluminum, and some auto products at the Canada-US border.
According to Hicks, roughly 15 percent of Canadian Tire’s spending on product acquisition or manufacturing is US-linked, with only a “manageable fraction of that… currently affected.”
Still, he cautioned that tensions between the US and China are “really starting to hit factories” in China — a major producer of global goods — which could shift the company’s exposure.
To manage these risks, Canadian Tire has established a “tariff task force” that explores alternatives to US goods, negotiates with vendors, and monitors margins to prevent customer price inflation.
“With limited exposure today, we have visibility to potential impacts and a plan for the balance of the year should we need it,” said Hicks.
These remarks followed the company’s first-quarter results, which showed a drop in profit due to restructuring costs.
Net income attributable to shareholders from continuing operations fell to $27.3m or 49 cents per diluted share, compared to $59.9m or $1.08 per share a year earlier.
Net income from discontinued operations reached $9.9m or 18 cents per diluted share, down from $16.9m or 30 cents per share last year.
On a normalized basis, Canadian Tire earned $2.00 per diluted share from continuing operations, up from $1.08 in the prior year. Revenue rose to $3.46bn from $3.33bn.
The quarter also marked the introduction of Canadian Tire’s True North strategy, which includes a $2bn investment over four years.
The initiative aims to modernize retail operations, enhance data use, develop agile technology, and expand the Triangle Rewards loyalty program.
A new partnership announced Thursday will let Triangle Rewards and WestJet Rewards members link accounts and collect combined rewards.
Analysts questioned whether mergers and acquisitions would be included in the True North strategy.
Two sources familiar with ongoing processes said Canadian Tire had bid on some of Hudson’s Bay intellectual property, though The Canadian Press did not name the sources, as they were not authorized to speak.
Hicks declined to confirm the bid. “As a practice, we don’t comment on rumours and speculation like this,” he said, adding that acquiring Hudson’s Bay operations “is just not a good fit for us right now, given all the things we have going on.”
However, he said the company continues to consider “attractive tuck-ins and brands,” noting this period is “no different on that front.”
