Shares of Canadian Tire Corp (CTC.A) rose more than 10% in early trading Thursday after the company announced better-than-expected financial results for its first quarter. Canadian Tire Corp is a general merchandise retailer selling gasoline, automobiles, sports, and home products.
Revenue for Q1 2021 came in at C$3.3 billion, up 16.7% year-on-year. It beats analysts' average estimate of C$2.92 billion, according to Refinitiv IBES data. Comparable sales increased 19.2% at the flagship Canadian Tire chain.
Like other retailers selling non-essentials, many Canadian Tire stores have operated under tighter restrictions earlier this year as the country struggled with the third wave of COVID-19 infections.
E-commerce sales grew 257% to C$450 million for the quarter ended April 3, while online sales for the Canadian Tire chain were nearly five times higher than in the same period last year.
Meanwhile, net income came in at C$186.4 million (C$2.47 per share) in Q1 2021 compared to C$12.2 million (C$-0.22 per share) in Q1 2020. On an adjusted basis, Canadian Tire earned C$2.57 per share in the quarter, exceeding the Refinitiv IBES estimate of C$0.62 per share.
Canadian Tire Corp’s President and CEO Greg Hicks said, “I am pleased with the sustained momentum of all of our businesses and with our unprecedented results in the first quarter, given significant store network restrictions. Our unique, multi-category assortment across all banners has been integral in meeting the demand for products in backyard living, outdoor activities, home projects, and industrial workwear. The continued growth in our digital capabilities was a key enabler of customers shopping us their way. Triangle Rewards also saw gains in the quarter with the addition of over 400,000 new members, and active members' average spend increasing 15%."
The company declared a quarterly dividend of $1.175 payable to holders of Class A non-voting shares and common shares payable on September 1, 2021, to shareholders of record on July 31, 2021. (See Canadian Tire Corp stock analysis on TipRanks)
Earlier this week, National Bank analyst Vishal Shreedhar reiterated a Buy rating on CTC.A while raising its price target to C$201.00 from C$199.00, for 4.5% downside potential.
Overall, CTC.A scores a Strong Buy consensus rating among analysts based on 6 Buys and 1 Hold. The average analyst price target of C$209.20 implies shares are fully priced at current levels. Shares have risen more than 25% year-to-date.