Canadian Tire reported solid financial results for both Q4 and the full fiscal year, despite spending 12.7% more on marketing and advertising in 2022.
The retailer earned a net income of $531.9 million in the three-month period ending Dec. 31, up from $508.5 million a year earlier. Revenue totaled $5.34 billion, up from $5.14 billion in the same quarter last year. For the full year, consolidated retail sales were up 5.4%, and 2.4% when excluding gas sales.
Consolidated SG&A spending increased 7.3%, largely because of strategic investments relating to the “Better Connected” strategy, a multi-billion dollar plan to improve its customer experience and omnichannel operations. SG&A was also due to higher volume-related supply chain costs, higher marketing and store operations expense.
Triangle Loyalty member sales were up 8%, continuing to outpace total retail sales, with 11.3 million active members in the program and loyalty penetration of close to 60% in 2022.
Greg Hicks, president and CEO at Canadian Tire Corporation noted, that Triangle Rewards membership delivered “outsized growth over the year” and continues to provide the retailer with the “rich first party data needed to offer personalized experiences and ultimately drive spend.”
The company’s owned brands now represent 37.6% of total retail sales, and the company continued to grow the portfolio, which includes the likes of Denver Hayes, MotoMaster and Canvas.
“In 2023, we will continue to focus on delivering value to our customers through the unique capabilities of our owned brands, multi-category assortment and Triangle Rewards,” Hicks says.
Comparable sales at Canadian Tire stores in Q4 were roughly in line with the previous year, though that quarter had been up 9.8% from 2020. Automotive delivering the strongest Q4 growth.
Mark’s had its tenth consecutive quarter of comparable sales growth, up 4.3%, driven by strength in footwear.
SportChek saw retail sales slump 1.6% over the same period last year, and comparable sales were down 1.7%. Licensed apparel sales were only able to partly offset declines in categories such as outerwear
Helly Hansen was a strong contributor to retail revenue growth in Q4 up 20.6%, led by increased sales of sportswear through its North American channels.
Finally, next month, Canadian Tire will launch mass marketing for Triangle Select, a new subscription model that includes a number of perks, including opportunities to earn more electronic Canadian Tire money.
“Throughout last year, we ran a beta test of Triangle Select, and what we learned is that Select really accentuates our differentiators: our own brands, our physical stores and Canadian Tire Money,” Hicks said. “In our beta test, the average member’s annual incremental earnings through Select-specific bonuses were more than three times this subscription fee.”
