Canadian Tire Earnings: Canada's Weather and Economy Pressuring Results; Shares Attractive

Canadian Tire closed a difficult 2023 with results that fell short of our estimates. As was the case throughout the year, high interest rates and other economic challenges weighed on consumer demand for nonessential goods across the firm’s retail banners in the critical holiday period. On top of that, Canada’s unseasonably warm weather suppressed sales of everything from outerwear to skiing equipment to gardening supplies. Consequently, the full-year consolidated revenue decline of 6.5% missed our estimate for a 3.5% drop, and normalized earnings per share came in at just $10.37, $2.09 below our forecast and down from $18.75 in 2022.