Canadian Tire (TSE:CTC) reported first-quarter 2026 earnings that management said came in ahead of plan, as stronger retail revenue and disciplined expense management helped offset weather-related weakness in comparable sales.
President and CEO Greg Hicks said the company “continued to perform and transform well” in the quarter, citing operational discipline and progress on Canadian Tire’s True North strategy. Diluted and normalized earnings per share were CAD 2.02, compared with normalized EPS of CAD 2.00 a year earlier, according to Executive Vice President and CFO Darren Myers.
Retail revenue excluding petroleum rose 5% in the quarter, helped by restocking after fourth-quarter sales and increased shipments of spring products. However, enterprise comparable sales declined 1%, as gains at SportChek and Mark’s were more than offset by lower sales at the Canadian Tire Retail banner.
Weather Weighs on Comparable Sales
Management attributed much of the comparable sales decline to timing and weather. Hicks said Canadian Tire’s first quarter was affected by strong winter sales that were pulled into the prior year’s 53rd week, while the final week of the quarter faced a delayed spring against strong year-earlier comparisons.
“Absent these factors, our overall comp would have been positive,” Hicks said. He added that in British Columbia, where weather has been more favorable, the company has seen “much better sales.”
Myers said Canadian Tire Retail started the quarter strongly in January, but a snowy February last year and a late start to spring this year weighed on several categories. Season and garden saw the largest decline, with weaker sales of snowblowers and patio furniture among the key drivers. The fixing division was a bright spot, with growth in tool storage and organization, as well as home repair and maintenance categories.
SportChek comparable sales increased 3.3%, supported by execution on retail fundamentals and brand partnerships. Myers said fan gear was a highlight, driven by demand ahead of the World Cup and the Olympics, while hockey performed well despite softer skiing and snowboarding sales. Mark’s comparable sales rose 1.2%, helped by casual wear and newer-format BBB stores.
Margins Stable as Company Invests in Value
Canadian Tire’s normalized retail gross margin rate, excluding petroleum, was stable year over year at 36.1%. Myers said the result reflected benefits from the company’s David pricing and promotions engine, as well as positive contributions from SportChek and Mark’s.
The retail SG&A rate as a percentage of revenue excluding petroleum improved 10 basis points. Myers said tighter operating discipline and restructuring savings were partly offset by higher IT spending and variable compensation. Normalized retail EBITDA rose 4.6% to CAD 349.7 million, while retail income before taxes was stable at CAD 50.9 million. Retail return on invested capital improved 56 basis points to 10.9%.
Hicks said customers remain resilient but selective, with more attention on value as household budgets face pressure. He said Triangle Mastercard data shows higher household spending at gas stations, a trend management is monitoring closely.
In response, Canadian Tire reduced prices on more than 10,000 SKUs in the first quarter, according to Executive Vice President and Chief Operating Officer TJ Flood. Hicks said the company is prioritizing products priced below CAD 50, which represent more than half of sales, and plans to add thousands of SKUs intended to combine newness with value.
Flood said the company is using AI-driven pricing tools and its “Margin Nerve Center” to decide where to invest in price and where to manage margins. “We are seeing consumers crave value,” he said.
Loyalty Data Shows Resilient Core Customers
Management said Canadian Tire’s loyalty data continues to show strength among registered Triangle members, including customers with lower incomes and higher debt burdens. Hicks said registered Triangle members are showing higher trips and steady baskets, though units per basket have softened.
Hicks said the “thrifty” customer segment has delivered the most robust sales growth in three of the last four quarters. He noted that softness is more evident in non-loyalty sales, while engaged Triangle members are increasing spend across customer segments.
Triangle member visits and sales significantly outpaced non-loyalty shoppers in the quarter, Hicks said. The company also highlighted growth in loyalty partnerships, including Petro-Points, RBC and WestJet. Hicks said the RBC and WestJet partnerships, launched in the quarter, have already added hundreds of thousands of newly linked members. Canadian Tire’s longer-term plan is to double the number of Triangle members engaged with partners from 2 million to 4 million.
Financial Services Results Remain Stable
At Canadian Tire Bank, credit card sales increased 4.7% in the first quarter, while gross average accounts receivable grew 3.1%. Myers said the growth reflected more accounts and higher average account balances tied to stronger card spend.
Risk metrics were described as broadly stable. Aging was flat year over year at 3.7%, while the net write-off rate was 7.2%, slightly higher than last year due to elevated insolvencies. The allowance remained CAD 935 million, while the allowance rate increased slightly to 12.3% because of a seasonal decline in ending receivables.
Myers said insolvencies remain a focus for the company, but payment patterns among cardholders are still “good” and the portfolio remains in a “decent and stable place.”
True North Investments and Q2 Outlook
Canadian Tire continued to invest in its True North strategy during the quarter, including store formats, digital tools, AI and loyalty. Hicks said the company plans about 70 real estate projects across its banners this year, including projects in Thunder Bay, Penticton and Saskatoon.
The company also expanded contextual search platforms to SportChek and Mark’s, with Canadian Tire Retail expected to scale up over the summer. Hicks said almost 40% of searches in those banners now produce unique, personalized results.
Looking to the second quarter, Myers said Canadian Tire is cycling a difficult comparison, as Q2 2025 comparable sales rose 5% and benefited from favorable weather and “patriotic purchasing.” Cooler weather through mid-May has led to a slow start to spring sales at Canadian Tire Retail, though management said sales growth in British Columbia supports confidence in the company’s spring assortment.
Dealer inventory was up 5% exiting the first quarter as dealers prepared for spring, summer and essential categories. Myers said inventory is in good shape, with improved aging and newness in the assortment. He also noted that June is the company’s largest month in the quarter, leaving a significant portion of Q2 still ahead.
During the quarter, Canadian Tire spent CAD 86.1 million on operating capital expenditures, primarily on omni-channel and store investments, and repurchased about 335,000 shares for CAD 60 million.
About Canadian Tire (TSE:CTC)
Canadian Tire Corporation, Limited, (TSX: CTC.A) (TSX: CTC) or 'CTC', is a group of companies that includes a Retail segment, a Financial Services division and CT REIT. Our retail business is led by Canadian Tire, which was founded in 1922 and provides Canadians with products for life in Canada across its Living, Playing, Fixing, Automotive and Seasonal & Gardening divisions. Party City, PartSource and Gas+ are key parts of the Canadian Tire network. The Retail segment also includes Mark's, a leading source for casual and industrial wear; Pro Hockey Life, a hockey specialty store catering to elite players; and SportChek, Hockey Experts, Sports Experts and Atmosphere, which offer the best active wear brands.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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