Canadian Tire's comparable sales rose 4.2 per cent in the quarter ended Jan. 3.Sean Kilpatrick/The Canadian Press
A walloping start to the winter season contributed to higher fourth-quarter sales for Canadian Tire Corp. Ltd. CTC-A-T, as customers came into the stores in search of shovels, boots and other cold-weather necessities.
The results beat analyst expectations for sales and profit growth in the fourth quarter.
As economic uncertainty continues, shoppers are proving “resilient, but discerning,” chief executive officer Greg Hicks said during a conference call on Thursday to discuss the results.
For example, sales of essential goods grew much more than discretionary purchases – areas where people can cut back as they cope with continuing pressures on household budgets.
“We did have some good growth in snow blowers,” which represent a big-ticket non-essential item, Mr. Hicks said. “Beyond that, that kind of healthy discretionary business is something we would look to come around in 2026.”
One surprise in the results, he noted, was that the company’s customer data indicated increasing spending spanning customers of all income levels. And the largest increases in the fourth quarter came from households with the highest debt burdens.
Comparable sales – an important metric that tracks sales growth at stores open for more than a year – rose by 4.2 per cent in the quarter ended Jan. 3, compared with the same period the prior year. That blew past analysts’ expectations for growth of 1.5 per cent, according to the consensus estimate from S&P Capital IQ.
The flagship Canadian Tire chain saw double-digit growth in sales of winter and holiday products in the quarter, contributing to 2.7-per-cent comparable sales growth. Outerwear and footwear partly drove sales growth of 9.5 per cent at Sport Chek. At Mark’s, weather-related products, as well as a strong Black Friday sales period, drove sales growth of 7.2 per cent in the quarter. W
Holiday sales were also strong at the stores, helped by a calendar year that included an extra week in the fourth quarter compared with the prior year. Revenue grew by 8.3 per cent to $4.6-billion.
Canadian Tire launched a small collection of products featuring the Bay’s recognizable multicoloured stripe design on time for the holidays.Chris Young/The Canadian Press
The holiday season included the first launch of a limited-run Hudson’s Bay collection, featuring the former stores’ classic multicoloured stripe design on products such as Christmas ornaments, mittens and pillows. The collection was the first use of the intellectual property, which Canadian Tire bought for $30-million as a result of the department stores’ insolvency. A “more comprehensive product set” will launch this summer, the company indicated in a press release on Thursday.
The Toronto-based retailer is now nearly one year into a four-year, $2-billion investment plan that it launched last March, which aims to transform the business and strip out inefficiencies. The “True North” strategy restructured Canadian Tire’s leadership team and led to job cuts. It includes plans to remodel a number of stores; expand the Triangle Rewards loyalty program; and improve its use of data and technology to change how its stores and online business operate.
Canadian Tire reported $30-million in savings on operating expenses in the fourth quarter, following job cuts that were completed in the prior quarter. Executives have signaled the intention to realize roughly $100-million in annualized savings through its True North initiatives.
The company completed 52 store projects during the year, which included renovating, expanding or opening new locations; roughly 70 more store refreshes are planned for this year.
Canadian Tire also introduced a new AI tool to assist with determining optimal pricing on its products, an effort that led to tens of thousands of price adjustments – both up and down – last year.
Membership in the Triangle program grew by 6 per cent during the year to 9.8 million users. A partnership with Petro-Canada’s loyalty program, implemented last year, exceeded expectations. The company has previously announced new loyalty partnerships with Tim Hortons and WestJet that will take effect in the coming year.
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Net income attributable to shareholders fell to $211-million in the quarter, compared wih $365.2-million in the same period the prior year. The results were affected by an impairment charge recorded in the quarter, as well as costs related to the company’s transformation projects; and in the prior year, a nearly $200-million gain on the sale of a distribution centre contributed to higher earnings.
Accounting for these and other factors, normalized net income attributable to shareholders grew to $238.3-million in the fourth quarter, or $4.47 per share on a normalized diluted basis, compared with $181-million or $3.24 in the prior year. That exceeded analysts’ expectations for normalized net income of $205.8-million or $3.80 per share, according to Capital IQ estimates.
For the full year, comparable sales grew by 4.1 per cent. For the first time, Canadian Tire’s automotive services business recorded annual sales of $1-billion. In total, retail sales grew to nearly $19-billion, up 4.5 per cent compared with the prior year.
Net income attributable to shareholders fell to $575.6-million in the year ended Jan. 3, 2026, compared with $831.3-million in the prior year. Normalized net income attributable to shareholders grew to $749.9-million for the full year, or $13.77 in normalized diluted earnings per share, compared to $647.1-million or $11.61 in the prior year.