Canadian Tire Corp. Ltd.Inventory levels were higher than usual due to the delay in the start of sales in warm weather and the early shipment of autumn/winter products. It's getting higher.
As of the end of the most recent quarter, the company's merchandise inventory increased by $465.6 million. This was approximately 18% higher than the same period last year due to increased inventory in transit. Spring and summer items are also in stock.
This situation raises concerns that retail giants may experience similar overstock problems and markdowns that US retailers have warned about.
However, Greg Hicks, president and CEO of Canadian Tire, said he was pleased with the company's ability to manage inventory levels, saying, "Especially for large retailers south of the border. Considering what I see," he said.
"We're happy with our inventory levels and we don't see a significant margin on him to clear inventory or a requirement for tiered markdowns," said the company's second-quarter forecast. He said in a Thursday call to discuss the results.
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The increase in product inventory at the end of June partly reflects a delayed start this spring, Hicks said. Stated. The company "recorded good performance for these products in July when warmer weather finally arrived," he said.
Inventory levels include more than $260 million of his goods in transit for fall and winter categories, which the company ordered early to minimize disruption to his supply chain. is also reflected, he said, Hicks.
Still, Canadian Tire's president of retail, TJ Flood, said the store's dealers were "a bit heavy in some spring and summer categories, perhaps hoping for less bikes and kayaks." There will be,' he said.
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However, he said declining sales of products such as bicycles, kayaks and paddleboards would lead to plumbing and He said it was offset by maintenance sales.
Canadian Tire reported second-quarter profit declined compared to the same period last year, even though earnings grew by double digits.
The company, which has retail, financial services, and real estate divisions, posted quarterly net income attributable to shareholders of $145.2 million, or $2.43 per diluted share, on annual earnings of $223.6 million, or $2.43 per diluted share. We just reported that it was down from $3.64 per diluted share.
In the three months ended July 2nd, he earned $4.4 billion in revenue, up 12.4% from $3.9 million in the same quarter in 2021.
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Overall retail sales were up 9.9%, with comparable sales excluding oil up 5%.
Canadian Tire's retail comparable sales growth was up 3.9%. According to Flood, deals are up, but the average number of items in each deal is down and the price per item is up.
The company's Marks his banner same-store sales increased 20.9% after he increased 43.2% in the same period last year.
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Brands such as Levi's, Carhartt and Timberland have helped attract customers under the age of 30.
Canadian Tire Financial Services revenues increased 15% driven by higher accounts receivable from higher customer activity and new account wins and higher credit card sales.
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After the company formally closed its Helly Hansen operations in Russia and withdrew from the market, in the quarter he Recorded one-time charges of $36.5 million.
RBC Dominion Securities analyst Eileen Nuttell said Canadian Tire's "messy quarter" overshadowed the company's "solid results."
She said underlying demand trends for the company remained strong as retail banners delivered strong revenue growth despite supply chain headwinds.
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