Canadian Tire Corp. Ltd. ‘s consolidated sales were down one per cent in the first quarter, due in part to the extended winter in most of the country, the company said Thursday.
Comparable sales at Canadian Tire retail stores dropped 2.3 per cent in the quarter ended April 4, with seasonal and gardening categories leading the weather-related decline, while fixing categories grew.
“Unfortunately, the seemingly endless Q1 winter clearly delayed the warmer weather and the inevitable sales it brings,” chief executive Greg Hicks told analysts during Thursday’s earnings call. “Like our customers, we have been patiently awaiting spring.”
Hicks said the seasons also didn’t line up neatly with the company’s quarterly reporting dates.
The first week of the quarter was negatively affected by strong winter sales having been pulled into last year’s 53rd week, while sales in the final week of the first quarter were negatively affected by a delayed spring compared to strong sales last year, he said. Absent these factors, overall comparable sales would have been positive, Hicks added.
Western Canada, which had better weather than most of the country, outperformed, while seasonal weakness affected sales in Ontario and Quebec, he said.
Active wear and casual wear retailers SportChek and Mark’s had continued sales growth, up 3.3 per cent and 1.2 per cent respectively, raising retail revenue as the company “positioned the business for spring demand,” Hicks said.
Canadian Tire’s consolidated revenue grew by 3.3 per cent to $3.57 billion in the quarter. Retail revenue grew 2.9 per cent, and five per cent if excluding petroleum.
The retailer’s loyalty sales outpaced non-loyalty sales, reflecting growth in active Triangle Rewards members, including increasing contributions from partnerships launched with Royal Bank of Canada and WestJet in the quarter.
The company is also watching how consumers respond to economic volatility, said Hicks.
“Similar to our comments at the end of 2025, we see a Canadian customer that is resilient but discerning,” he said. “In the face of macroeconomic confusion, they have their chin up and their eyes wide open.”
The CEO said that even with strained budgets, customers are still shopping, but they are more selective and value driven.
Hicks said the company’s Triangle credit card data shows significant increases in household spending at the gas pump, which he said is no surprise, but has their attention.
He said that as customers search for value, the retailer has lowered prices on some products in response.
“(As) discerning customers move to value, we, too, are moving to value with a highly relevant and highly measured approach,” he said. “For example, in Q1 when customers traditionally prioritize life’s essential products, we lowered thousands of prices for Canadians.”
He added that the company “remains value-focused heading into spring.” This includes prioritizing products priced below $50, which account for more than half of its sales. It also plans to add thousands of SKUs.
Online sales and clearance alone drove about $5 million in incremental sales in the first quarter, creating a clear picture of customers bias for value, said Hicks. Spend per basket at Canadian Tire stores was up despite fewer units and more deeply discounted items, he said.
The gap between essential and discretionary sales performance is narrowing, he added.
Canadian Tire data reveal that its lowest income, highest-debt customers are driving the most robust sales growth, “as counterintuitive as it may seem,” he said.
“I think one of the biggest surprises that we have is what we’re continuing to see from a spend standpoint for high indebted households,” he said.
Hicks said the company has the greatest amount of data on registered Triangle members, which they segment into different groups: “from affluent all the way down to thrifty.”
Triangle Mastercard holders are paying their balances “at levels we describe as stable or healthy,” he said, and overall, Triangle member visits and sales significantly outpaced that of non-loyalty.
He said that with those engaged Triangle members, the company is seeing trips increased, baskets steady and a little bit of softness in units per basket.
That data is based on the loyalty program’s 7.5 to eight million members, not from every customer that comes through the stores, said TJ Flood, chief operating officer.
“There continues to be a little bit of separation to the positive in terms of that really thrifty customer that has high debt burden,” said Flood. “If thrifty customers are growing their spend with us at more than 10 per cent, more than double digit, they have to be spending 10 per cent everywhere else for us not to be taking their share.”
• Email: dpaglinawan@postmedia.com