TORONTO, March 6,
2025 /CNW/ - Canadian Tire Corporation, Limited
(TSX:CTC, TSX:CTC.A, CTC or the Company) today announced a new
four-year transformative growth strategy, True North,
focused on data-driven customer relationships, core retail growth,
an expanded Triangle Rewards loyalty system, and focused capital
allocation. It is designed to increase value for customers and
generate leading shareholder value above the Company's historic
levels. The strategy will be delivered by a newly designed senior
leadership team, and CTC will reorganize from a complex holding
company model into a more agile operating company, aggregated to
compete and differentiated through its collective customer
insights.
"We are an iconic Canadian retailer primed for stronger customer
connections and leading shareholder returns," said Greg Hicks, President and CEO, Canadian Tire
Corporation. "In a new era of retail and hyper-scale global
competition, we will operate more efficiently and go to market more
strategically, harnessing our banners and loyalty system to elevate
our scale. Our transformation starts from the strengths that set us
apart: we have the highest customer trust, market-leading data, and
the vision to know, reward and serve Canadians best."
True North represents CTC's next strategic horizon,
marking the end of Better Connected which established a
springboard for higher performance. The Company concluded 2024 with
strong earnings, an improved balance sheet, and increased customer
loyalty.
True North initiatives designed to accelerate
retail growth and loyalty expansion
True North entails dozens of strategic initiatives
designed to accelerate retail growth and deliver improved financial
performance. This includes investments in omnichannel network
expansion and new data analytics that will be a catalyst for
growing market share and expanding CTC's total addressable
market.
The Company will accelerate the Triangle Rewards loyalty system
through its privileged first-party data, enabled by technology and
AI. The loyalty system will expand with more personalized member
value, additional brand partners that issue Canadian Tire Money
beyond CTC stores, and a new retail-focused bank strategy to
acquire and engage more Triangle Mastercard holders.
An expanded loyalty system will fortify CTC's connections to its
best customers and more systematically inspire members to shop at
more of its stores and more often. True North initiatives
are designed to increase Triangle Rewards loyalty membership and
loyalty sales across banners.
New operating model designed for agility and scale
To execute True North, CTC will reorganize, converting
from a holding company model of individual businesses focused on
products to an operating company universally focused on customers.
This new operating model aggregates CTC's multiple banners,
systems, and data, resulting in a density of customer insights and
competitive scale that no single banner could achieve alone.
The Company will continue to strengthen the customer-facing
value propositions of each individual banner brand, but will work
to eliminate siloed, redundant and costly back-office processes and
systems. The new operating model is designed for greater agility
and speed, with common enterprise-wide capabilities and platforms
built and deployed once – such as the Company's recent conversion
of all major banner websites onto a single digital platform. A
more-unified CTC will continue its technology and AI
implementations, reinventing ways of working to improve the speed
of analytics, decisions, information and workflows company-wide.
This will result in both increased efficiency and more strategic
customer engagement across the banners.
Strengthened leadership focused on customers, retail
execution, and value creation
True North will be delivered by a newly designed senior
leadership group of existing and added executive talent, with new
roles announced today to reflect three priorities: Disciplined
management of several significant multi-year transformation
initiatives and related value-creating capital allocation will be
governed by a new transformation office led by a new Chief
Transformation Officer; Core retail business execution and growth
will be led by a new Chief Operating Officer within a unified
operating model for all banners, including Canadian Tire,
SportChek, and Mark's; Customer-focused retail, product, marketing
and loyalty strategies will be centralized and led by a new Chief
Commercial Officer. Various corporate teams within CTC will be
reorganized to reflect this structure and the underlying
priorities.
- Susan O'Brien is appointed
EVP & Chief Transformation Officer. A 17-year company
veteran, she was most recently EVP & Chief Brand and Customer
Officer. Her past leadership of Triangle Rewards and experience
building new customer capabilities will ensure transformation
initiatives stay true to customer-centricity.
- TJ Flood is appointed EVP & Chief Operating Officer,
leading CTC's newly centralized banners, including Canadian Tire,
Mark's and SportChek. A 20-year company veteran, he was most
recently EVP & President, Canadian Tire Retail and previously
President, SportChek. This experience will enable the shift to
centralized processes and cross-banner efficiencies.
- Following a comprehensive search, the Company will soon appoint
an EVP & Chief Commercial Officer responsible for
growing Triangle Rewards, customer insights and core retail
processes that enable horizontal, data-driven strategies for great
customer experiences.
- Darren Myers, CTC's new EVP
& Chief Financial Officer, joins April 1 as announced here. He is a three-time CFO
at Canadian companies, previously responsible for large-scale
transformations in retail and other sectors.
- CTC's executive leadership team is otherwise detailed
here.
"This team has the experience and mandate to deliver
transformational initiatives and results," said Hicks. "As we knock
down unnecessary legacy siloes and systems, we are combining the
best of our business and all of our customer knowledge to rally
around a unified strategy to help make life in Canada better. Together, our combined scale
and our insights will set us apart from competitors big and
small."
Enhanced capital allocation and streamlined operating
model
With a simplified focus and structure dedicated to retail growth
and shareholder value, CTC's leadership will enhance capital
allocation through prioritizing the highest-returning investments
and assets. This is evident in the Company's recent portfolio
moves: The decision to retain full ownership of Canadian Tire
Financial Services with a strategy to maximize its retail-driving
capabilities; unlocking shareholder value with the February 19, 2025, announcement of the agreement
to sell global performance brand Helly Hansen; and the monetization
of redundant real estate assets.
Today, CTC also announces that, as part of True North, it
is optimizing its SportChek portfolio, with new-concept stores and
a revised go-to-market strategy for its Atmosphere business. The
Company will close 17 uncompetitive standalone Atmosphere stores,
with 14 sites to be co-located within SportChek stores.
Going forward, and assuming the completion of the sale of Helly
Hansen, CTC will extend its balanced approach to capital
allocation, including the following:
- It will prioritize investments to transform its core Canadian
retail business, while maintaining flexibility to address market
uncertainty. In this context, CTC expects total operating capital
expenditures in 2025 to be towards the upper end of its previously
disclosed range of $525 million to
$575 million. This will include
capital investments in omnichannel customer experience, like the
continued modernization of Canadian Tire stores. The Company also
plans increased investments in Mark's, to capitalize on its record
of accretive returns and emerging market-share opportunities in the
casual apparel sector.
- It will return up to $400 million
to shareholders through share repurchases in 2025, doubling its
previously disclosed 2025 intention of up to $200 million.
- It will use $200 million of
proceeds to reduce debt, re-paying medium-term notes ahead of their
2026 maturity.
CTC expects to invest more than $2
billion over four years starting in 2025; expense savings
begin in 2025 with $100 million run
rate expected to start in 2026
"Our strategy, structure and initiatives begin in 2025, and
improved value creation is expected in the years ahead," said
Hicks. "We look forward to detailing our early progress and
longer-term returns with greater precision as they begin to take
shape. In the meantime, we have begun to put capital behind our
conviction and expect to invest more than $2
billion over the next four years, driving the prosperity of
our company and, by extension, our country."
The Company expects increased transformation and advisory costs
in relation to its four-year strategy, including the following:
- Operating expenses will increase by $60
million in 2025, primarily for IT investments to enable
transformation initiatives.
- One-time charges of approximately $85
million in transformation and restructuring costs, including
severance, as well as closure costs for Atmosphere stores. These
costs will be recorded and normalized in the first half of 2025.
They are expected to deliver annualized operating expense savings
of $100 million starting in
2026.
The Company's management team intends to provide updates on its
True North activities throughout 2025, beginning when it
reports its first-quarter results on May 8,
2025.
FORWARD-LOOKING INFORMATION
This press release contains information that may constitute
forward-looking information within the meaning of applicable
securities laws, which reflect management's current expectations
regarding future events and the Company's transformation strategy.
All statements other than statements of historical facts contained
in this press release may constitute forward-looking information,
including but not limited to, information with respect to: the
impacts of the Company's transformative growth strategy, including
with respect to increased shareholder value and returns, stronger
customer connections, accelerated retail growth, improved financial
performance, growth in market share, expanded total addressable
market, and increased Triangle Rewards loyalty membership, partners
and loyalty sales; the proposed sale of Helly Hansen; plans with
respect to the use of proceeds from the proposed Helly Hansen sale,
including additional investments to prioritize its core Canadian
retail business, the increased 2025 share repurchase intention and
debt repayment intention; planned Atmosphere store closures and
co-located Atmosphere sites within SportChek stores; planned
investments in connection with the Company's transformative growth
strategy, including 2025 and four year operating capital
expenditures as well as the anticipated areas of investment; the
expected increase to 2025 operating expenditures; the planned
one-time charge for transformation and restructuring costs; and the
expected savings beginning in 2025 and expected annualized
operating expense savings starting in 2026. Readers are cautioned
that such information may not be appropriate for other purposes.
Often, but not always, forward-looking information can be
identified by the use of forward-looking terminology such as "may",
"will", "expect", "intend", "believe", "estimate", "plan", "can",
"could", "should", "would", "outlook", "target", "forecast",
"anticipate", "aspire", "foresee", "continue", "ongoing" or the
negative of these terms or variations of them or similar
terminology. Although the Company believes that the
forward-looking information in this press release is based on
information, estimates and assumptions that are reasonable, such
information is necessarily subject to a number of risks,
uncertainties and other factors that could cause actual results to
differ materially from those expressed or implied in such
forward-looking information.
Some of CTC's business and operational risks include risks with
respect to strategic agility, franchise operations, brand and
reputation, geopolitical conditions (including tariffs), talent,
macroeconomic conditions, technology infrastructure, emerging and
disruptive technology, cyber security, data and privacy, third
parties, supply chain, responsible sourcing, loyalty program,
competitive environment, customer trends, seasonality, legal,
climate change, ESG and business disruptions. Some of CTC's
financial risks include risks with respect to credit, liquidity,
market, commodity price, and insurance.
For more information on the material risks, uncertainties,
factors and assumptions that could cause the Company's actual
results to differ materially from the forward-looking information,
refer to section 14.0 (Forward-Looking Information and Other
Investor Communication) of the Company's 2024 Fourth Quarter and
Full-Year Management's Discussion and Analysis and all
subsections therein, available on the SEDAR+ website at
http://www.sedarplus.ca and https://investors.canadiantire.ca. The
Company does not undertake to update any forward-looking
information, whether written or oral, except as is required by
applicable laws.
ABOUT CANADIAN TIRE CORPORATION
Canadian Tire Corporation, Limited (TSX: CTC.A, TSX: CTC, "CTC")
has been a proudly Canadian business since 1922. Guided by its
brand purpose, "We are here to make life in Canada better," CTC has built an expansive
national retail presence, exceptional customer brand trust and one
of Canada's strongest workforces –
employing, along with its local Dealers and franchisees, tens of
thousands of Canadians. At its core are retail businesses, each
designed to serve life's pursuits: Canadian Tire, offering products
spanning Living, Playing, Fixing, Automotive, and Seasonal &
Gardening, bolstered by notable banners Party City and PartSource;
Mark's, a leading source for casual and industrial wear; SportChek,
Hockey Experts, Sports Experts and Atmosphere, offering the best
brands of active wear and gear; and Pro Hockey Life, a hockey
specialty store catering to elite players. CTC's banners, brand
partners and credit card offerings are unified through its Triangle
Rewards loyalty program – a linchpin of CTC's customer-driven
strategy. With nearly 12 million members, Triangle integrates
first-party data to deliver valuable rewards and personalized
experiences across nearly 1,700 retail and gasoline outlets. CTC
also operates a retail petroleum business and a Financial Services
business and holds a majority interest in CT REIT, a TSX-listed
Canadian real estate investment trust. For more information, visit
Corp.CanadianTire.ca.
FOR MORE INFORMATION
Media: Stephanie Nadalin, (647)
271-7343, stephanie.nadalin@cantire.com
Investors: Karen Keyes, (647)
518-4461, karen.keyes@cantire.com
SOURCE Canadian Tire Corporation, Limited
