Canadian Tire revenue down as consumer spending softens

Canadian Tire Corp. Ltd. is the latest retailer to warn of softening consumer demand as high costs of living continue to rein in spending.

“The increased cost of living combined with higher interest rates has created a period of hesitation among Canadian consumers,” president and CEO Greg Hicks told analysts during a conference call Thursday.

“This has had an obvious impact on our operations,” he added.

The retailer, which also owns SportChek, Mark’s, Party City and Pro Hockey Life, reported Thursday its first-quarter profit rose compared with a year ago as its revenue fell about five per cent. Its net income attributable to shareholders totalled $76.8 million or $1.38 per diluted share for the quarter ended March 30, up from a profit of $7.8 million or 13 cents per diluted share in the same quarter last year when it was hit by costs related to a warehouse fire.

Revenue for the quarter totalled $3.52 billion, down from $3.71 billion in the same period last year. Softer demand in the last few quarters led store dealers to pull back on inventory, especially on non-essential items.

“We saw dealers continue to manage the health of the inventory by drawing inventory down,” said TJ Flood, executive vice-president of Canadian Tire.