Canadian Tire (CTC) Q4 2024 earnings summary

Executive summary

• Achieved normalized EPS of CAD 4.07 in Q4 and annual EPS of CAD 12.62, a significant improvement over 2023, aided by one-time items and strong December sales.

• Returned to growth in Q4 with consolidated comparable and retail sales up 1.1%, driven by strategic promotions, margin management, and loyalty program engagement.

• Triangle Rewards loyalty program attracted nearly 500,000 new and returning members in 2024, with Q4 loyalty sales up 4% and full-year up 1%.

• Strategic initiatives included $1.8B in capital expenditures since 2022 and $1.9B returned to shareholders via buybacks and dividends.

• Retained full ownership of CTFS, reinforcing the importance of the bank for loyalty and data-driven retail growth.

Financial highlights

• Q4 2024 consolidated IBT was $529.1M, up $266.1M; normalized IBT rose 13.9% to $324.3M.

• Q4 normalized EPS was CAD 4.07, up 20% year-over-year; annual normalized EPS reached CAD 12.62, up 21.7%.

• Retail revenue up 1.3% to CAD 4.1 billion in Q4; Q4 revenue increased 1.5% to $4,507.3 million.

• Retail gross margin rate (excluding Petroleum) improved 50 bps to 36.0% for FY 2024.

• Retail cash from operating activities reached nearly $1.7B, up from $1.1B in 2023.

Outlook and guidance

• Targeting flat to modest top-line growth and maintaining North Star margin rate of 35.9% for 2025.

• 2025 operating capital expenditures expected in the range of $525 million to $575 million.

• Intends to repurchase up to $200 million of Class A Non-Voting Shares in 2025 under NCIB, subject to regulatory approvals.

• New distribution center in Metro Vancouver set to open in 2025, supporting regional capacity expansion.

• March 6th will bring a new strategy update; Q1 call in May will provide updated guidance.