Canadian Tire eyes e-commerce as 'mammoth opportunity'
A Canadian Tire store is photographed in North Vancouver, B.C., on May 10, 2012. (THE CANADIAN PRESS/Jonathan Hayward)
Linda Nguyen, The Canadian Press
Published Thursday, February 18, 2016 3:35PM EST
TORONTO -- The next acquisition for Canadian Tire Corp. will likely be in e-commerce, says the head of the national retailer.
"We set a path for ourselves to be a leader in e-commerce in Canada and that's where we're heading," president and CEO Michael Medline told analysts during a call Thursday following the company's latest quarterly results.
E-commerce is a "mammoth opportunity" for the general merchandiser to establish a firm footing in the new, emerging digital world, Medline said.
"We're doing a great job in our Old World assets, which are going to be a huge part of our business for the foreseeable future," he said. "We're now going to transform ourselves and dominate in e-commerce."
The Toronto-based company (TSX:CTC) said growing its digital business will help shield it in the future from some of the uncontrollable negative factors that can impact its business, such as a weakened economy, declining oil and currency prices and this year's unseasonably warm winter.
Canadian Tire said about a quarter of its sales in the fourth quarter were related to winter gear such as long johns and snowboards, with its clothing chain Mark's having the most seasonal exposure.
Still, it said it overcame these factors, including lower prices for the gasoline it sells, to grow its profit for the period ended Jan. 2.
Canadian Tire reported net income of $241.5 million or $3.01 per share for the fourth quarter. That was up about 17 per cent from $206.6 million or $2.44 per share a year earlier, when several expenses were higher.
Its retail revenue fell 7.5 per cent to $3.38 billion from $3.65 billion, but that was partly due to one less week of selling in the latest quarter and also because of warm weather, the downturn in the Alberta economy and lower gasoline prices.
Excluding petroleum sales, Canadian Tire's overall revenue was $3 billion -- down 5.8 per cent from a year earlier.
Same-store sales -- those open for at least a year -- declined 5.2 per cent at Mark's when compared to the same quarter a year ago, while at FGL Sports they went down 0.4 per cent. Sport Chek saw a 1.6 per cent increase in same-store sales and Canadian Tire recorded a 2.0 per cent rise in same-store sales.
although up 1.6 per cent at the Sport Chek stores. Canadian Tire same-store sales were up 2.0 per cent from the year-earlier quarter.
For the full year ended Jan. 2, 2016, the company had $735.9 million of net income, up from $639.3 million in fiscal 2015. Revenue was $12.3 billion, down from $12.5 billion.