Canadian Tire closing National Sports stores

TORONTO • Canadian Tire Corp Ltd breezed past profit estimates and posted a 13 per cent growth in holiday-quarter revenue on Thursday, as the home and sporting goods retailer's online sales more than doubled on the back of a pandemic-led boom in e-commerce.

But the Toronto-based retailer also said it is closing all its National Sports stores to reduce overlap in the company's sporting goods assortment after an internal evaluation.

Demand for pool supplies, garden equipment and other home-related items has boomed since the onset of the COVID-19 outbreak as people splurge more on remodelling their living spaces during lockdowns.

Canadian Tire has been investing more in e-commerce in recent months, and doubling down on sportswear and apparel at its Mark's and SportChek stores to attract younger shoppers.

Overall retail revenue jumped about 15 per cent to $4.58 billion, while company revenue rose about 13 per cent to $4.87 billion in the fourth quarter ended Jan. 2.

Canadian Tire has also been controlling costs by centralizing operations including marketing and sourcing for its multiple retail banners, even as it incurs heavy supply chain costs due to the health crisis.

The automotive, home and sporting goods retailer's net income attributable to its shareholders jumped about 46 per cent to $488.8 million, or $7.97 per share.

Excluding items, Canadian Tire earned $8.4 per share, crushing a Refinitiv IBES estimate of $6.69.

Shares in the company, which were mostly flat on Thursday, have jumped about 5 per cent this year.

All 18 of the National Sports stores across southern Ontario will be closing, Gregory Craig, the retailer's chief financial officer, told investors on Thursday, The Canadian Press reported.

“This has been a difficult decision, particularly due to its impact on people,” he said during a conference call. “We're making every effort to place affected employees within our family of companies.”

The company, which operates multiple retailers including Canadian Tire, Mark's, SportChek, Atmosphere, Sports Experts and Pro Hockey Life, made the announcement as it reported that its fourth-quarter profit and revenue both rose significantly compared with a year ago.

Closing National Sports is part of the company's strategy to increase operational efficiencies and focus on core assets, said Greg Hicks, president and CEO of Canadian Tire Corp., CP said in its report.

“It's a smaller banner for us, for sure, but the decision to close the business is a matter of focus,” he told investors. “There's always been a fair amount of overlap with this banner and both SportCheck and (Canadian Tire).”