Canadian Tire Corporation, Limited · TSX:CTC
Canadian Tire — Q1 2023 Earnings Presentation
23 slides from Canadian Tire's earnings presentation, May 11, 2023
Slide 1: Q1 2023 Financial Results and Segment Eliminations
Canadian Tire Corporation Q1 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 FIRST QUARTER 2023 | EXECUTIVE PARTICIPANTS 3
Slide 4: Table of Contents
Table of Contents Topic Slide Number Q1 2023 HIGHLIGHTS 5 Q1 2023 DILUTED EARNINGS PER SHARE BRIDGE 9 IMPACT OF CHANGE IN ACCOUNTING ESTIMATE FOR 11 MARGIN-SHARING ARRANGEMENT Q1 2023 FINANCIAL RESULTS AND NORMALIZATION 14 SEGMENT ELIMINATIONS 21 FIRST QUARTER 2023 | TABLE OF CONTENTS 4
Slide 5: Q1 2023 Highlights
Q1 2023 HIGHLIGHTS FIRST QUARTER 2023 | HIGHLIGHTS 5
Slide 6: Q1 2023 Highlights
Q1 2023 Highlights Consolidated comparable sales1 were down 2.5% versus strong growth in 2022, in a more challenging consumer demand environment, driven by the impact of a mild winter and late arrival of spring. o Canadian Tire Retail comparable sales1 were down 4.8%. Lower sales of winter and sprin
Slide 7: Q1 2023 Highlights (continued)
Q1 2023 Highlights (continued) Consolidated income before income taxes (“IBT”) was $66.6 million, a decrease of $228.3 million compared to the prior year, with Financial Services segment income offset by a loss of $79.3 million in the Retail segment, resulting in diluted EPS of $0.13. Excluding the
Slide 8: Q1 2023 Highlights (continued)
Q1 2023 Highlights (continued) Since the beginning of 2023, the Company has continued to invest in its strategic differentiators as part of its Better Connected strategy, including: o Expanding the reach of the Triangle Rewards program and opportunities for engagement with our 11.4 million active me
Slide 9: Q1 2023 EPS Bridge
Q1 2023 EPS BRIDGE FIRST QUARTER 2023 | EPS BRIDGE 9
Slide 10: Impacts to Q1 2023 Diluted EPS
Impacts to Q1 2023 Diluted EPS Normalized Diluted EPS (normalized for the impact of the Other one time benefits and costs (included in normalized charge related to the direct costs associated with the DC Diluted EPS): fire) was $1.00. (+) The favourable impact of the change in accounting estimate re
Slide 11: Impact of Change in Accounting Estimate for Margin-Sharing Arrangement
IMPACT OF CHANGE IN ACCOUNTING ESTIMATE FOR MARGIN- SHARING ARRANGEMENT FIRST QUARTER 2023 | IMPACT OF CHANGE IN ACCOUNTING ESTIMATE FOR MSA 11
Slide 12: 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 13: 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 will record the MSA throughout the yea
Slide 14: Q1 2023 Financial Results and Normalization
Q1 2023 FINANCIAL RESULTS AND NORMALIZATION FIRST QUARTER 2023 | CONSOLIDATED RESULTS 14
Slide 15: Q1 2023 Consolidated Financial Results
Q1 2023 Consolidated Financial Results 1 For further information about this measure see section 9.2 of the Company’s Q1 2023 MD&A. 2 Certain prior year figures have been restated to conform to the current year presentation. FIRST QUARTER 2023 | CONSOLIDATED RESULTS 15
Slide 16: Q1 2023 Normalizing Items
Q1 2023 Normalizing Items • The results of operations in the first quarter of 2023 and 2022 include costs associated with the DC fire and costs relating to the Company’s Operational Efficiency program, respectively, which were considered as normalizing items. These costs are included in Other expens
Slide 17: Selected Q1 2023 Normalized Metrics: Consolidated
Selected Q1 2023 Normalized Metrics: Consolidated 1 Refer to Normalizing Items table in section 4.1.1 of the Company’s Q1 2023 MD&A. 2 These normalized measures (excluding revenue, cost of producing revenue, gross margin, gross margin rate, depreciation and amortization, and net finance costs) are n
Slide 18: Q1 2023 Retail Segment Financial Results
Q1 2023 Retail Segment Financial Results 1 For further information about this measure see section 9.2 of the Company’s Q1 2023 MD&A. 2 Certain prior year figures have been restated to conform to the current year presentation. 3 Not Meaningful. FIRST QUARTER 2023 | RETAIL RESULTS 18
Slide 19: Selected Q1 2023 Normalized Metrics: Retail
Selected Q1 2023 Normalized Metrics: Retail 1 Refer to section 4.1.1 of the Company’s Q1 2023 MD&A for a description of normalizing items. 2 These normalized measures (other expense (income), selling, general and administrative expenses and income before income taxes) are non-GAAP financial measures
Slide 20: Q1 2023 Financial Services Results
Q1 2023 Financial Services Results 1 For further information about this measure see section 9.2 of the Company’s Q1 2023 MD&A. 2 Certain prior year figures have been restated to conform to the current year presentation. 3 Not meaningful. FIRST QUARTER 2023 | FINANCIAL SERVICES RESULTS 20
Slide 21: Segment Eliminations
SEGMENT ELIMINATIONS FIRST QUARTER 2023 | SEGMENT ELIMINATIONS 21
Slide 22: Q1 2023 Segment Reporting Note Disclosure
Q1 2023 Segment Reporting Note Disclosure BASED ON REPORTED Q1 2023 1 CT REIT revenue is comprised of $104.3 million of base rent and $33.2 million in expense and capital recoveries and other revenue. The property revenue attributable to CTC is $122.4 million. 2 This is a non-GAAP financial measure
Slide 23: Thank You
Thank You For more information: http://investors.canadiantire.ca 23