eCommerce Sales Surged 400%
TORONTO, Aug. 6, 2020 /CNW/ – Canadian Tire Corporation, Limited (TSX:CTC) (TSX: CTC.A) today released its second quarter results for the period ended June 27, 2020.
“This quarter we drove extraordinary retail sales growth, particularly at our core Canadian Tire Retail (CTR) banner, further reinforcing the relevancy of our unique, multi-category assortment to our customers.With a significant percentage of our store network closed for much of the quarter, customers turned to our online platforms and we saw eCommerce sales surge across all banners by 400%. Our strong results in CTR clearly demonstrate the advantage of our Dealer model and our ability to quickly adapt to local market and customer needs.”
“We continue to fulfill our deep-rooted purpose of being there for life in Canada, no matter what life may look like. I am incredibly proud of the contributions of our dedicated frontline store, distribution centre and contact centre employees, as well as our Associate Dealers, who place the customer at the heart of everything we do.”
-Greg Hicks, President and CEO, Canadian Tire Corporation-
Significant Events that Impacted the Company this Quarter
During the second quarter of 2020, the global spread of Coronavirus (COVID-19) continued to have a significant impact on the Canadian and global economy and customer purchasing behaviour, while equity markets remained volatile. These factors impacted the Company’s operations, financial results for the quarter, and forward-looking information provided in the Company’s 2019 Report to Shareholders.
Meeting the needs of Canadians and communities, protecting the health and well-being of employees, customers, Dealers and franchisees and maintaining a financially strong business remained the Company’s main priorities throughout the quarter.
Retail Segment retail sales and revenue in the quarter
- Retail sales, excluding Petroleum were up 9.3 percent compared to prior year, despite the temporary store closures, led by Canadian Tire Retail growth of 20.3 percent. The Canadian Tire Retail stores that were open for the full quarter saw retail sales growth of 29.8 percent.
- Retail sales and revenue performance were significantly impacted by store closures, with 203 Canadian Tire stores in Ontario closed for the majority of April, re-opening on May 9, and all SportChek, Mark’s, Helly Hansen PartSource, PHL, and Party City stores closed with staggered re-openings starting in mid May.
- eCommerce sales across all banners saw unprecedented sales and penetration growth in the quarter. As stores re-opened and customers began to become more comfortable with shopping in-store, the Company saw eCommerce penetration rates decline slightly, but they still remained significantly higher than 2019. Total eCommerce sales grew almost 400 percent in the quarter and the total dollar value of over $600 million was greater than total eCommerce sales for the full year of 2019.
- By the end of the quarter, substantially all of the Company’s stores in Canada were open for business.
- Retail sales at Canadian Tire Ontario stores declined 36.4 percent while the stores were closed and grew 35.4 percent after re-opening.
- SportChek sales were down 24.9% and Mark’s sales were down 36.4% in the quarter, as strength in eCommerce sales was not enough to offset the impact of stores closures in April and May.
- Once stores began to re-open, both SportChek and Mark’s saw a rebound in June with sales up 3.2% and 3.4% respectively versus last year.
- For the quarter, Canadian Tire Retail revenue (which was up 1.4 percent) lagged retail sales, as in April and May Ontario Dealers were cautious in ordering due to the uncertain environment. When Ontario stores were closed, shipments to Ontario Dealers decreased by 26.3 percent. Despite the Company’s strong supply chain capabilities, due to global demand for certain items across multiple categories, Dealer and customer demand was not fully met, which also contributed to the discrepancy between revenue and retail sales.
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ABOUT CANADIAN TIRE CORPORATION
Canadian Tire Corporation, Limited, (TSX: CTC.A) (TSX: CTC) or “CTC”, is a family of businesses 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, National Sports, Intersport and Atmosphere, which offer the best active wear brands. The more than 1,740 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 global brand in sportswear and workwear based in Oslo, Norway. For more information, visit Corp.CanadianTire.ca.