Canadian Tire digital push needed: CEO
Canadian Tire Corp.’s reinstated chief executive Stephen Wetmore stressed the need to become a more digitally integrated retailer Thursday during the company’s first conference call since the surprise exit of CEO Michael Medline last month.
The country’s largest retailer of automotive, kitchen and sporting goods posted strong sales and beat analyst estimates in the second quarter, and Wetmore, who led the retailer from 2009 to 2014, reassured analysts he had confidence in the company’s current executive team.
On the analyst call he thanked Medline, who reportedly left after the board had disagreed with the pace and direction of the retailer’s e-commerce initiatives.
“E-commerce and digital interactions will play an increasingly critical role in how we connect with our customers,” said Wetmore, who noted the retailer no longer “dictates the terms” of its digitally-savvy customers’ shopping experiences. “We must move rapidly, not only in our omnichannel offering, but to develop new tools and new skills to meet our customers’ demands,” he said.
The company needs to focus on developing its loyalty programs and ability to analyze the data to mine customer key insights, he added.
Wetmore, who famously scrapped Canadian Tire’s first sales website in 2009 because he wasn’t happy with its execution, said the company is currently engaged in 30 different e-commerce initiatives, covering areas from search optimization to back-end fulfilment.
“Not all of these will be home runs, but every one of them is getting us to a more sustainable and profitable model,” he said. “Like every legacy bricks and mortar retailer, timing and approach are critical.”
One bright spot this year has come from the retailer’s Wow Guide, a glossy traditional catalogue tailored to interact with the retailer’s mobile app to unlock additional product information, videos, and other content. E-commerce transactions have more than doubled since the guide went live in April, executives said, though the company doesn’t break out its online sales.
Net income in the period ending July 2 rose eight per cent to $179.4 million, or $2.46 per share, compared with earnings of $166 million ($2.15) in the same period a year earlier That eclipsed average analyst estimates of $2.33, according to Thomson Reuters. Canadian Tire’s shares rose more than four per cent in afternoon trading to $143.52.
The company’s revenue rose to $3.35 billion from $3.25 billion in the same period a year ago, and also beat analyst estimates of $3.31 billion. Overall retail sales rose 3.1 per cent to $3.98 billion from 3.86 billion a year ago, while sales at Canadian Tire’s 501 stores and 91 PartSource outlets rose 4.2 per cent to $1.9 billion.
Same-store sales, a key measure of retail strength tallying volume at locations open for more than a year, climbed 2.9 per cent.
Sales at the retailer’s FGL Sports division, which includes Sport Check stores, rose 5.7 per cent to $496.5 million, and same-store sales were up 5.8 per cent. Retail sales at its Mark’s apparel banner climbed 4.4 per cent to $260.9 million and same-store sales rose 4.6 per cent.