Yahoo Finance Canadian Tire profit hit by weather, fire and spending slowdown
Canadian Tire Corp. profit dropped in the first quarter, hit by unseasonal weather, a fire at an Ontario distribution centre and a slowdown in consumer spending.
The Toronto-based retailer posted revenue of $3.7 billion for the quarter ended April 1, down from $3.8 billion in the same period last year, according to results released May 11.
Consolidated income before taxes was $66.6 million, a decrease of $228.3 million compared to the year prior. The company said a March fire at one of its facilities in Brampton, Ont. weighed on income, costing $67.7 million. Diluted earnings per share fell to 13 cents per share compared with $3.03 last year.
“Our Q1 financial results were impacted by a number of factors. Our retail segment was impacted by the fire at our A.J.Billes distribution centre, as well as unseasonably mild winter weather and a slow start to spring in several regions of Canada,” chief executive Greg Hicks said in a statement.
The downbeat results reinforce a previous warning from management at the end of the last fiscal year that revenue could be impacted by the slowing economy and consumers tightening their purse strings.
Revenue for the company’s retail segment, which includes brands such as its namesake store, SportChek and Mark’s, dropped almost five per cent from the previous year to $3.3 billion.
Canadian Tire’s financial services business buoyed results, contributing $118.7 million of income before taxes.
“The Financial Services business historically makes a significant contribution to Canadian Tire Corporation’s performance in the first quarter, and this quarter was no different,” Hicks said.
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