Canadian Tire Corporation, Limited · TSX:CTC
Canadian Tire — Q4 2023 Earnings Presentation
27 slides from Canadian Tire's earnings presentation, Feb 15, 2024
Slide 1: Canadian Tire Corporation Q4 2023 Financial Results and Segment Eliminations
Canadian Tire Corporation Q4 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 Executive Vice President & President, Canadian Tire Retail FOURTH QUARTER 2023 | EXECUTIVE PARTICIPANT
Slide 4: Table of Contents
Table of Contents Topic Slide Number FY 2023 & Q4 2023 HIGHLIGHTS 5 Q4 2023 DILUTED EARNINGS PER SHARE (“EPS”) BRIDGE 9 IMPACT OF CHANGE IN ACCOUNTING ESTIMATE FOR MARGIN-SHARING ARRANGEMENT 11 FY 2023 & Q4 2023 FINANCIAL RESULTS AND NORMALIZATION 13 FY 2023 & Q4 2023 SEGMENT ELIMINATIONS 24 FOURTH
Slide 5: FY 2023 & Q4 2023 Highlights
FY 2023 & Q4 2023 HIGHLIGHTS FOURTH QUARTER 2023 | HIGHLIGHTS 5
Slide 6: FY 2023 Highlights
FY 2023 Highlights • Full year consolidated comparable sales1 were down 2.9% and Retail sales excluding Petroleum1 were down 3.1%, reflecting softening of consumer demand through the second half of the year and the impact of unseasonable weather in Q4. • Retail Gross Margin rate (excluding Petroleum
Slide 7: FY 2023 Highlights
FY 2023 Highlights • The Company's commitment to enhancing the customer experience was evident through the refresh and modernization of 45 Canadian Tire stores, the opening of three new stores in Quebec (Mont Tremblant and Sherbrooke) and Ontario (Toronto), as well as four new Mark’s WorkPro stores.
Slide 8: Q4 2023 Highlights
Q4 2023 Highlights • Consolidated comparable sales were down 6.8% and consolidated Retail sales excluding Petroleum were down 6.9%, reflecting continued softening of consumer demand, compounded by weaker sales in winter categories across all banners due to unseasonable weather across the country in
Slide 9: Q4 2023 Diluted Earnings Per Share Bridge
Q4 2023 DILUTED EARNINGS PER SHARE BRIDGE FOURTH QUARTER 2023 | EPS BRIDGE 9
Slide 10: Impacts to Q4 2023 Diluted EPS
Impacts to Q4 2023 Diluted EPS Normalized Diluted EPS1 in Q4 2023 was $3.38 due to Other items included in normalized year over year impacts from MSA timing and Other Diluted EPS: 1 (-) The unfavourable timing impact of the change in accounting estimate relating to the Company’s MSA: $171.0M (or the
Slide 11: Impact of Change in Accounting Estimate for Margin-Sharing Arrangement
IMPACT OF CHANGE IN ACCOUNTING ESTIMATE FOR MARGIN- SHARING ARRANGEMENT FOURTH QUARTER 2023 | IMPACT OF CHANGE IN ACCOUNTING ESTIMATE FOR MSA 11
Slide 12: Background to Change in Accounting Estimate From Q1 2023
Background to Change in Accounting Estimate From Q1 2023 • Effective from the first quarter of 2023, the Company’s results reflect a change in accounting estimate relating to the Company’s MSA with Dealers. The Company has historically accrued the majority of the annual benefit from its MSA with the
Slide 13: FY 2023 & Q4 Financial Results and Normalization
FY 2023 & Q4 FINANCIAL RESULTS AND NORMALIZATION FOURTH QUARTER 2023 | CONSOLIDATED RESULTS 13
Slide 14: Q4 & FY 2023 Consolidated Financial Results
Q4 & FY 2023 Consolidated Financial Results (C$ in millions, except where noted) Q4 2023 Q4 2022 Change 2023 2022 Change Retail sales1 $ 5,323.4 $ 5,729.4 (7.1) % $ 18,504.1 $ 19,248.8 (3.9) % Revenue $ 4,443.0 $ 5,340.4 (16.8) % $ 16,656.5 $ 17,810.6 (6.5) % Gross margin dollars $ 1,536.8 $ 2,018.4
Slide 15: Q4 & FY 2023 Normalizing Items
Q4 & FY 2023 Normalizing Items • The full year results of operations in 2023 include costs and recoveries associated with the DC fire, the GST/HST-related charge, the Change in fair value of redeemable financial instrument, and the fourth quarter headcount reduction charge, which were considered as
Slide 16: Selected FY 2023 Normalized Metrics: Consolidated
Selected FY 2023 Normalized Metrics: Consolidated (C$ in millions, except Normalizing Normalized Normalizing Normalized where noted) 2023 Items1 20232 2022 Items1 20222 Change3 Revenue $ 16,656.5 $ — $ 16,656.5 $ 17,810.6 $ — $ 17,810.6 (6.5) % Cost of producing revenue 10,952.9 — 10,952.9 11,712.7
Slide 17: Selected Q4 2023 Normalized Metrics: Consolidated
Selected Q4 2023 Normalized Metrics: Consolidated (C$ in millions, except Normalizing Normalized Normalizing Normalized where noted) Q4 2023 Items 1 Q4 2023 2 Q4 2022 Items 1 Q4 20222 Change3 Revenue $ 4,443.0 $ — $ 4,443.0 $ 5,340.4 $ — $ 5,340.4 (16.8) %* Cost of producing revenue 2,906.2 — 2,906.
Slide 18: Q4 & FY 2023 Retail Segment Financial Results
Q4 & FY 2023 Retail Segment Financial Results (C$ in millions, except where noted) Q4 2023 Q4 2022 Change 2023 2022 Change Retail sales1 $ 5,323.4 $ 5,729.4 (7.1) % $ 18,504.1 $ 19,248.8 (3.9) % Revenue $ 4,070.0 $ 4,990.9 (18.5) % $ 15,171.3 $ 16,436.3 (7.7) % Gross margin dollars $ 1,338.8 $ 1,825
Slide 19: Selected FY 2023 Normalized Metrics: Retail
Selected FY 2023 Normalized Metrics: Retail (C$ in millions, except Normalizing Normalized Normalizing Normalized where noted) 2023 Items1 20232 2022 Items1 20222 Change3 Revenue $ 15,171.3 $ — $ 15,171.3 $ 16,436.3 $ — $ 16,436.3 (7.7) % Cost of producing revenue 10,324.6 — 10,324.6 11,198.3 — 11,1
Slide 20: Selected Q4 2023 Normalized Metrics: Retail
Selected Q4 2023 Normalized Metrics: Retail (C$ in millions, except Normalizing Normalized Normalizing Normalized where noted) Q4 2023 Items1 Q4 20232 Q4 2022 Items1 Q4 20222 Change3 Revenue $ 4,070.0 $ — $ 4,070.0 $ 4,990.9 $ — $ 4,990.9 (18.5) %* Cost of producing revenue 2,731.2 — 2,731.2 3,165.2
Slide 21: Q4 & FY 2023 Financial Services Results
Q4 & FY 2023 Financial Services Results (C$ in millions) Q4 2023 Q4 2022 Change 2023 2022 Change Revenue $ 379.9 $ 357.2 6.4 % $ 1,507.3 $ 1,389.7 8.5 % Gross margin dollars $ 181.7 $ 180.4 0.7 % $ 783.4 $ 803.9 (2.6) % Gross margin rate1 47.8 % 50.5 % (270) bps 52.0 % 57.8 % (587) bps Other expense
Slide 22: Selected FY 2023 Normalized Metrics: Financial Services
Selected FY 2023 Normalized Metrics: Financial Services (C$ in millions, except Normalizing Normalized Normalizing Normalized where noted) 2023 Items1 20232 2022 Items1 20222 Change3 Revenue $ 1,507.3 $ — $ 1,507.3 $ 1,389.7 $ — $ 1,389.7 8.5 % Gross margin dollars 783.4 — 783.4 803.9 — 803.9 (2.6)
Slide 23: Selected Q4 2023 Normalized Metrics: Financial Services
Selected Q4 2023 Normalized Metrics: Financial Services (C$ in millions, except where Normalizing Normalized Normalizing Normalized noted) Q4 2023 Items1 Q4 20232 Q4 2022 Items1 Q4 2022 Change3 Revenue $ 379.9 $ — $ 379.9 $ 357.2 $ — $ 357.2 6.4 % Gross margin dollars 181.7 — 181.7 180.4 — 180.4 0.7
Slide 24: FY 2023 & Q4 2023 Segment Eliminations
FY 2023 & Q4 2023 SEGMENT ELIMINATIONS FOURTH QUARTER 2023 | SEGMENT ELIMINATIONS 24
Slide 25: FY 2023 Segment Reporting Note Disclosure
FY 2023 Segment Reporting Note Disclosure 5 & 6 6 3 5 & 4 7 6 FOURTH QUARTER 2023 | SEGMENT ELIMINATIONS 1 CT REIT revenue is comprised of $422.8 million of base rent and $130.0 million in expense and capital recoveries and other revenue. The property revenue attributable to CTC is $494.3 million. 2
Slide 26: Q4 2023 Segment Reporting Note Disclosure
Q4 2023 Segment Reporting Note Disclosure 1 5 & 6 6 2 3 5 1 & 4 7 1 6 4 FOURTH QUARTER 2023 | SEGMENT ELIMINATIONS 1 CT REIT revenue is comprised of $107.5 million of base rent and $32.4 million in expense and capital recoveries and other revenue. The property revenue attributable to CTC is $125.0 m
Slide 27: Thank You
Thank You For more information: http://investors.canadiantire.ca 27