Canadian Tire Corporation, Limited · TSX:CTC
Canadian Tire — Q3 2023 Earnings Presentation
22 slides from Canadian Tire's earnings presentation, Nov 9, 2023
Slide 1: Canadian Tire Corporation Q3 2023 Financial Results and Segment Eliminations
Canadian Tire Corporation Q3 2023 Financial Results and Segment Eliminations
Slide 2: Forward Looking Information
Forward Looking Information This document contains information that may constitute forward-looking information reflecting Management’s current expectations relating to matters such as future financial performance and operating results of the Company. Forward-looking information provides insights reg
Slide 3: Executive Participants
Executive Participants Greg Hicks President & Chief Executive Officer, Canadian Tire Corporation Gregory Craig Executive Vice President & Chief Financial Officer, Canadian Tire Corporation TJ Flood President, Canadian Tire Retail THIRD QUARTER 2023 | EXECUTIVE PARTICIPANTS 3
Slide 4: Table of Contents
Table of Contents Topic Slide Number Q3 2023 HIGHLIGHTS 5 Q3 2023 DILUTED EARNINGS PER SHARE BRIDGE 7 IMPACT OF CHANGE IN ACCOUNTING ESTIMATE FOR MARGIN-SHARING ARRANGEMENT 9 Q3 2023 FINANCIAL RESULTS AND NORMALIZATION 12 SEGMENT ELIMINATIONS 19 THIRD QUARTER 2023 | TABLE OF CONTENTS 4
Slide 5: Q3 2023 Highlights
Q3 2023 HIGHLIGHTS THIRD QUARTER 2023 | HIGHLIGHTS 5
Slide 6: Q3 2023 Highlights
Q3 2023 Highlights • Consolidated comparable sales1 were down 1.6%, as the consumer spend softening experienced in Q2 persisted into Q3, particularly in Ontario and British Columbia (“BC”). o Canadian Tire Retail comparable sales1 were down 0.6%; essential categories were up 4%, led by Automotive. o
Slide 7: Q3 2023 Diluted EPS Bridge
Q3 2023 DILUTED EPS BRIDGE THIRD QUARTER 2023 | EPS BRIDGE 7
Slide 8: Impacts to Q3 2023 Diluted EPS
Impacts to Q3 2023 Diluted EPS Normalized Diluted EPS was $2.96 due to the change in fair value of redeemable financial Normalizing items: instrument and insurance recoveries related to the DC fire 1 (+) Change in fair value of redeemable financial instrument: $328.0M (or the equivalent of $5.88 of
Slide 9: Impact of Change in Accounting Estimate for Margin-Sharing Arrangement
IMPACT OF CHANGE IN ACCOUNTING ESTIMATE FOR MARGIN- SHARING ARRANGEMENT THIRD QUARTER 2023 | IMPACT OF CHANGE IN ACCOUNTING ESTIMATE FOR MSA 9
Slide 10: Background to Change in Accounting Estimate From Q1 2023
Background to Change in Accounting Estimate From Q1 2023 • Effective from the first quarter of 2023, the Company’s results reflect a change in accounting estimate relating to the Company’s MSA with Dealers. The Company has historically accrued the majority of the annual benefit from its MSA with the
Slide 11: Quarterly Phasing Impacts as a Result of Change in Accounting Estimate
Quarterly Phasing Impacts as a Result of Change in Accounting Estimate • Based on the experience gained since the inception of the MSA, the Company has developed a methodology to better estimate the impact on a quarterly basis. Effective in Q1 2023, the Company began to record the MSA throughout the
Slide 12: Q3 2023 Financial Results and Normalization
Q3 2023 FINANCIAL RESULTS AND NORMALIZATION THIRD QUARTER 2023 | CONSOLIDATED RESULTS 12
Slide 13: Q3 2023 Consolidated Financial Results
Q3 2023 Consolidated Financial Results YTD YTD (C$ in millions, except where noted) Q3 2023 Q3 2022 Change Q3 2023 Q3 2022 Change Retail sales1 $ 4,639.3 $ 4,734.2 (2.0) % $ 13,180.7 $ 13,519.4 (2.5) % Revenue $ 4,250.5 $ 4,228.8 0.5 % $ 12,213.5 $ 12,470.2 (2.1) % Gross margin dollars $ 1,436.5 $ 1
Slide 14: Q3 2023 Normalizing Items
Q3 2023 Normalizing Items • The year-to-date results of operations in 2023 include costs and recoveries associated with the DC fire, the GST/HST- related charge, and Change in the fair value of the redeemable financial instrument which were considered as normalizing items. In 2022, costs relating to
Slide 15: Selected Q3 2023 Normalized Metrics: Consolidated
Selected Q3 2023 Normalized Metrics: Consolidated (C$ in millions, except Normalizing Normalized Normalizing Normalized where noted) Q3 2023 Items1 Q3 20232 Q3 2022 Items1 Q3 20222 Change3 Revenue $ 4,250.5 $ — $ 4,250.5 $ 4,228.8 $ — $ 4,228.8 0.5 % Cost of producing revenue 2,814.0 — 2,814.0 2,843
Slide 16: Q3 2023 Retail Segment Financial Results
Q3 2023 Retail Segment Financial Results YTD YTD (C$ in millions, except where noted) Q3 2023 Q3 2022 Change Q3 2023 Q3 2022 Change Retail sales1 $ 4,639.3 $ 4,734.2 (2.0) % $ 13,180.7 $ 13,519.4 (2.5) % Revenue $ 3,867.3 $ 3,873.7 (0.2) % $ 11,101.3 $ 11,445.4 (3.0) % Gross margin dollars $ 1,207.0
Slide 17: Selected Q3 2023 Normalized Metrics: Retail
Selected Q3 2023 Normalized Metrics: Retail (C$ in millions, except Normalizing Normalized Normalizing Normalized where noted) Q3 2023 Items1 Q3 20232 Q3 2022 Items 1 Q3 20222 Change3 Revenue $ 3,867.3 $ — $ 3,867.3 $ 3,873.7 $ — $ 3,873.7 (0.2) % Cost of producing revenue 2,660.3 — 2,660.3 2,720.4
Slide 18: Q3 2023 Financial Services Results
Q3 2023 Financial Services Results YTD YTD (C$ in millions) Q3 2023 Q3 2022 Change Q3 2023 Q3 2022 Change Revenue $ 393.1 $ 360.4 9.1 % $ 1,127.4 $ 1,032.5 9.2 % Gross margin dollars $ 210.9 $ 218.1 (3.3) % $ 601.7 $ 623.5 (3.5) % Gross margin rate1 53.7 % 60.5 % (685) bps 53.4 % 60.4 % (701) bps Ot
Slide 19: Segment Eliminations
SEGMENT ELIMINATIONS THIRD QUARTER 2023 | SEGMENT ELIMINATIONS 19
Slide 20: Q3 Segment Reporting Note Disclosure
Q3 Segment Reporting Note Disclosure 1 5 & 6 6 2 3 5 1 & 4 7 1 6 4 THIRD QUARTER 2023 | SEGMENT ELIMINATIONS 1 CT REIT revenue is comprised of $105.7 million of base rent and $31.7 million in expense and capital recoveries and other revenue. The property revenue attributable to CTC is $122.9 million
Slide 21: Q3 YTD Segment Reporting Note Disclosure
Q3 YTD Segment Reporting Note Disclosure 5 & 6 6 3 5 & 4 7 6 THIRD QUARTER 2023 | YTD SEGMENT ELIMINATIONS 1 CT REIT revenue is comprised of $315.3 million of base rent and $97.6 million in expense and capital recoveries and other revenue. The property revenue attributable to CTC is $369.3 million.
Slide 22: Thank You
Thank You For more information: http://investors.canadiantire.ca 22