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Canadian Tire Swings to Profit in Q2

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Canadian Tire Corporation Limited (CTC.A), a general merchandise retailer selling gasoline, automobiles, sports, and home products, beat expectations in the second quarter of 2021.

Revenue for Q2 2021 came in at C$3.92 billion, up 24% from C$3.16 billion in Q2 2020. Canadian Tire experienced its biggest quarter in history for ecommerce sales, up 63.2% to over C$600 million. (See Canadian Tire Corp stock charts on TipRanks)

The company also reported a net income attributable to shareholders of C$223.6 million (C$3.64 per diluted share) in Q2 2021, compared to a loss of C$20 million (-C$0.33 per diluted share) in Q2 2020.

On a normalized basis, the retailer earned C$3.72 per share in the quarter, compared with a year-prior loss of C$0.25 per share. Analysts on average expected adjusted earnings of C$2.88 per share and C$3.85 billion in revenue.

Canadian Tire president and CEO Greg Hicks said, “I am pleased with our strong results, which clearly demonstrated our omni-channel capabilities and the growing customer connection to our brand. With a third of our stores impacted by closures, and many more subjected to restrictions during the quarter, our customers embraced our digital channels, driving eCommerce sales to record levels and doubling the volume of orders compared to last quarter.

“Demand for our Owned Brands reached 38% of total sales across our Canadian Tire, SportChek and Mark’s banners and helped drive our strong product margins. We continued to grow our Triangle Rewards program, welcoming almost 600,000 new customers in the quarter, with active members up 11%.”

The company declared a quarterly dividend of $1.175 payable on December 1, 2021 to shareholders of record on October 31, 2021.

On August 9, Desjardins analyst Chris Li reiterated a Buy rating on CTC.A with a price target of C$234.00. This implies 16.6% upside potential.

Overall, CTC.A scores a Strong Buy consensus rating among analysts based on six Buys and two Holds. The average Canadian Tire price target of C$230.50 implies 15.2% upside potential to current levels. Shares have risen more than 20% year-to-date.

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The post Canadian Tire Swings to Profit in Q2 appeared first on TipRanks Financial Blog.

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