Canadian Tire (TSE:CTC) executives pointed to a strong finish to fiscal 2025 and said the company is carrying momentum into 2026 as it continues to execute its “True North” strategy, emphasizing both performance and transformation. Management also reminded listeners that results discussed were largely on a normalized continuing-operations basis, with Helly Hansen presented as discontinued operations following its sale on May 31, 2025.
Full-year results and loyalty-driven growth
President and CEO Greg Hicks said fiscal-year retail sales and revenue increased 5%, profitability rose 14%, and earnings per share increased 19% to CAD 13.77. He noted the results benefited from an extra week of retail operations in 2025 versus 2024, but said annual comparable retail sales were up 4%, with comparable sales exceeding 4% in three of four quarters.
Loyalty was a central theme. Triangle Rewards active registered members grew 6% to 9.8 million, and Hicks said increased uptake on personalized offers drove about CAD 300 million in incremental sales. In Q&A, management also highlighted an increasing “separation” between loyalty and non-loyalty sales, which Hicks described as evidence that members are seeking and receiving value.
Fourth-quarter performance and the extra week impact
Executive Vice President and CFO Darren Myers said Q4 was “an exceptionally strong finish,” with strong retail performance, lower finance costs, and stable financial services results helping drive 33% growth in normalized income before taxes (IBT). Normalized EPS increased 38% year-over-year to CAD 4.47, supported by improved retail profitability and share repurchases.
Myers quantified the impact of the 53rd retail week, estimating it generated CAD 287 million of retail sales (excluding petroleum) and approximately CAD 40 million of IBT in 2025. He said the extra week benefited from favorable weather-related demand.
On an underlying 13-week basis, Myers said comparable sales grew 4.2%, with all banners and regions posting growth. Contributors included strong in-stock positions to meet weather-driven demand, successful Black Friday promotions, and a meaningful contribution from loyalty sales tied to increased engagement and more active members.
Banner highlights: weather, events, and category strength
Management highlighted strength across the portfolio in Q4:
- CTR: Comparable sales grew 2.7%. Seasonal and Garden posted double-digit growth, supported by an early start to winter that pulled forward sales in categories such as snowblowers, shovels, and ice melt. Automotive posted its 22nd consecutive quarter of growth, driven by batteries, wipers, and tires.
- Sport Chek: Comparable sales rose 9.5%. Myers cited fan gear demand tied to the Blue Jays postseason run and an early lead-up to the World Cup, plus strong outerwear performance supported by favorable weather. Hicks later said the Blue Jays impact represented about “1.5” of comp benefit for Sport Chek, while events such as the Olympics and World Cup could help sustain momentum.
- Mark’s: Comparable sales increased 7.2%, led by workwear and industrial footwear. Management also pointed to traffic gains at Bigger, Better, Bolder (BBB) stores, record Black Friday and e-commerce sales supported by Triangle promotional tools, and the contribution of the first BBB store in Quebec.
In Q&A, management said CTR’s growth was widespread, with “almost 90%” of categories growing in the quarter. Hicks also pointed to a continued gap between essentials and discretionary items at CTR (essentials up 4.7% versus discretionary up 1.6%) and described CTR’s Living division as an area of underperformance relative to other divisions due to lower “newness and innovation” from suppliers.
Margins, costs, inventory, and financial services trends
Myers said normalized retail gross margin rate (excluding petroleum) increased 118 basis points to 35.4%, with CTR and Sport Chek benefiting from mix dynamics and lower promotional intensity in the prior year. He also cited ongoing benefits from the company’s “David” implementation and improved margin sharing with dealers at CTR.
SG&A rate as a percentage of revenue (excluding petroleum) improved 40 basis points, with Myers attributing that to operating discipline and higher revenue. He said the company realized CAD 30 million in restructuring savings in the quarter and noted higher vacancies partially offset costs tied to higher volumes, True North IT investments, real estate expenses, and variable compensation.
Normalized retail EBITDA rose 19% to CAD 557 million, and normalized retail IBT increased 49% to CAD 242 million. Corporate inventory ended the quarter up 8%, driven primarily by CTR and Sport Chek, while dealer inventory at CTR was up 5%.
In financial services, Myers said 2025 was “a year of investment” to position the bank for long-term growth and resilience. Q4 credit card sales increased 3.9%, gross average receivables (GAR) grew 2.5%, and eCTM issuance to cardholders increased more than 12% to CAD 329 million over 2025. CTFS gross margin dollars increased 11%, and normalized IBT rose 3%. Risk metrics were described as stable, with PD2+ ending at 3.5% and the net write-off rate at 7.2%.
2026 outlook: store refreshes, AI initiatives, partnerships, and capital allocation
Management said Q1 2026 was off to a good start, helped by winter weather demand in late January and February, while cautioning that the company is cycling favorable weather and strong March demand from the prior year. Myers also said the company will be cycling “tough weather comps” and “strong patriotic purchasing” from the first half of 2025.
On profitability, Myers said a 35%+ retail gross margin rate remains a long-term anchor, adding that the company has “added the plus” versus prior commentary. He said rolling out “David” to Sport Chek and Mark’s in late 2026, along with continued optimization at CTR, is expected to help underpin gross margin over time, while acknowledging quarter-to-quarter variation.
Hicks outlined continued investment in store concepts and refreshes, noting 52 were completed last year and approximately 70 are planned for 2026. He said e-commerce is growing at about twice the rate of brick-and-mortar and pointed to initiatives such as faster fulfillment, easier transactions, contextual AI search, and same-day delivery, which he said is generating strong NPS scores. He also said the company adjusted “tens of thousands of prices” based on deeper insights, and by Q4, consumer price value perception improvements were “industry-leading,” with regular pricing perception up 15 points year-over-year.
Partnerships were positioned as a key lever for Triangle “velocity.” Hicks said more than 600,000 members have linked Triangle and Petro-Points and that those customers are spending about 10% more than similar, less engaged members. In Q&A, he said RBC “came out of the gates quickly,” citing 150,000 linked members, and noted functionality to convert Avion points to eCTM is expected by spring. He also said WestJet and Tim’s are “on the horizon,” while emphasizing the company is focusing on a limited number of strategic verticals rather than building a broad coalition.
Hicks also described a new AI initiative with Microsoft—an “AI intelligence engine” called Mosaic—designed to match the company’s retail system to “moments of Canadian life.” He said a pilot using an LLM surfaced more than a thousand “occasions,” and the company expects to begin commercializing the approach in the back half of 2026.
On capital allocation, Myers said return on invested capital improved to 11% in 2025. Operating CapEx was CAD 502 million, below the company’s range due to project discipline and timing, and he guided to CAD 500 million to CAD 550 million in CapEx for 2026. The company repurchased over CAD 440 million of shares in 2025, reducing share count by about 5%.
Hicks reiterated the company’s longer-term True North conviction—annual retail sales growth of 3% to 5% with earnings growing faster than sales—while stressing it is not near-term guidance and can be influenced by factors including geopolitics, economics, and weather. Canadian Tire said it will provide its next update with Q1 results at its AGM on May 14.
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.
