Fourth quarter revenue increased 16% to $3.2 billion. Diluted EPS of $5.29
Full year revenue increased 19% to $9.6 billion. Diluted EPS of $12.20, adjusted EPS of $12.77
VANCOUVER, British Columbia–(BUSINESS WIRE)–
lululemon athletica inc. (NASDAQ:LULU) today announced financial results for the fourth quarter and fiscal year ended January 28, 2024.
Calvin McDonald, Chief Executive Officer, stated: “We are pleased with the strong finish to our 2023 fiscal year and continue to be ahead of our Power of Three ×2 strategy. During the fourth quarter, we saw continued momentum across our channels, geographies, and merchandise categories, driven by our teams around the world. As we step into 2024, we are focused on the significant opportunities ahead for lululemon as we navigate the dynamic retail environment and deliver for guests through innovative new products and brand activations.”
The adjusted non-GAAP financial measures below exclude certain inventory provisions, goodwill and other asset impairments, and restructuring costs recognized in relation to lululemon Studio, the gain on the sale of an administrative office building, and the related tax effects of these items.
For the fourth quarter of 2023, compared to the fourth quarter of 2022:
Net revenue increased 16% to $3.2 billion.
Americas net revenue increased 9%.
International net revenue increased 54%, or 56% on a constant dollar basis.
Comparable sales increased 12%.
Americas comparable sales increased 7%.
International comparable sales increased 43%, or 44% on a constant dollar basis.
Gross profit increased 25% to $1.9 billion. Adjusted gross profit increased 20% to $1.9 billion.
Gross margin increased 430 basis points to 59.4%. Adjusted gross margin increased 200 basis points to 59.4%.
Income from operations increased 191% to $913.9 million. Adjusted income from operations increased 16%.
Operating margin increased to 28.5% from 11.3% in the fourth quarter of 2022. Adjusted operating margin increased 20 basis points to 28.5%.
The effective income tax rate for the fourth quarter of 2023 was 28.1% compared to 62.3% for the fourth quarter of 2022. The adjusted effective tax rate was 28.7% for the fourth quarter of 2022.
Diluted earnings per share were $5.29 compared to $0.94 in the fourth quarter of 2022. Adjusted diluted earnings per share were $4.40 for the fourth quarter of 2022.
The Company repurchased 0.1 million of its shares for a cost of $54.0 million.
The Company opened 25 net new company-operated stores during the quarter, ending with 711 stores.
For 2023 compared to 2022:
Net revenue increased 19% to $9.6 billion, or increased 20% on a constant dollar basis.
Americas net revenue increased 12%.
International net revenue increased 54%, or 58% on a constant dollar basis.
Comparable sales increased 13%, or 14% on a constant dollar basis.
Americas comparable sales increased 8%, or 9% on a constant dollar basis.
International comparable sales increased 35%, or 39% on a constant dollar basis.
Gross margin increased 290 basis points to 58.3%. Adjusted gross margin increased 240 basis points to 58.6%.
Operating margin increased 580 basis points to 22.2%. Adjusted operating margin increased 110 basis points to 23.2%.
The effective income tax rate was 28.8% for 2023 compared to 35.9% for 2022. The adjusted effective tax rate was 28.7% for 2023 compared to 28.1% for 2022.
Diluted earnings per share were $12.20 compared to $6.68 in 2022. Adjusted diluted earnings per share were $12.77 in 2023 compared to $10.07 in 2022.
The Company repurchased 1.5 million shares for a cost of $554.6 million.
The Company opened 56 net new company-operated stores during the year, ending with 711 stores.
Meghan Frank, Chief Financial Officer, stated: “Our solid fourth quarter and full year 2023 results demonstrate the strength and resilience of our omni operating model and our differentiated position in the marketplace. Looking ahead, we will stay focused on driving the business forward for the near-and long-term, while operating with agility and discipline. We are still early in our growth journey, and excited for what the future holds.”
Balance Sheet Highlights
The Company ended 2023 with $2.2 billion in cash and cash equivalents compared to $1.2 billion at the end of 2022. It had $393.7 million of capacity under its committed revolving credit facility at the end of 2023.
Inventories at the end of 2023 decreased by 9% to $1.3 billion compared to $1.4 billion at the end of 2022.
Fiscal 2024 Outlook
For the first quarter of 2024, the Company expects net revenue to be in the range of $2.175 billion to $2.200 billion, representing growth of 9% to 10%. Diluted earnings per share are expected to be in the range of $2.35 to $2.40 for the quarter. This assumes a tax rate of 29.0% to 29.5%.
For 2024, the Company expects net revenue to be in the range of $10.700 billion to $10.800 billion, representing growth of 11% to 12%, or 10% to 11% excluding the 53rd week of 2024. Diluted earnings per share are expected to be in the range of $14.00 to $14.20 for the year. This assumes a tax rate of approximately 30%.
The guidance does not reflect potential future repurchases of the Company’s shares.
The guidance and outlook forward-looking statements made in this press release are based on management’s expectations as of the date of this press release and do not incorporate future unknown impacts, including macroeconomic trends. The Company undertakes no duty to update or to continue to provide information with respect to any forward-looking statements or risk factors, whether as a result of new information or future events or circumstances or otherwise. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of risks and uncertainties, including those stated below.
Power of Three ×2
The Company’s Power of Three ×2 growth plan calls for a doubling of the business from 2021 net revenue of $6.25 billion to $12.5 billion by 2026. The key pillars of the plan are product innovation, guest experience, and market expansion and the growth strategy includes a plan to double men’s, double e-commerce, and quadruple international net revenue relative to 2021.
Conference Call Information
A conference call to discuss 2023 results is scheduled for today, March 21, 2024, at 4:30 p.m. Eastern time. Those interested in participating in the call are invited to dial 1-800-319-4610 or 1-604-638-5340, if calling internationally, approximately 10 minutes prior to the start of the call. A live webcast of the conference call will be available online at: https://corporate.lululemon.com/investors/news-and-events/events-and-presentations. A replay will be made available online approximately two hours following the live call for a period of 30 days.
About lululemon athletica inc.
lululemon athletica inc. (NASDAQ:LULU) is a technical athletic apparel, footwear, and accessories company for yoga, running, training, and most other activities, creating transformational products and experiences that build meaningful connections, unlocking greater possibility and wellbeing for all. Setting the bar in innovation of fabrics and functional designs, lululemon works with yogis and athletes in local communities around the world for continuous research and product feedback. For more information, visit lululemon.com.
Non-GAAP Financial Measures
Constant dollar changes and adjusted financial results are non-GAAP financial measures.
A constant dollar basis assumes the average foreign currency exchange rates for the period remained constant with the average foreign currency exchange rates for the same period of the prior year. The Company provides constant dollar changes in its results to help investors understand the underlying growth rate of net revenue excluding the impact of changes in foreign currency exchange rates.
Adjusted gross profit, gross margin, income from operations, operating margin, income tax expense, effective tax rates, net income, and diluted earnings per share exclude certain inventory provisions, goodwill and other asset impairments, and restructuring costs recognized in relation to lululemon Studio, the gain on disposal of assets for the sale of an administrative office building, and the related income tax effects of these items.
The Company believes these adjusted financial measures are useful to investors as they provide supplemental information that enable evaluation of the underlying trend in its operating performance, and enable a comparison to its historical financial information. Further, due to the finite and discrete nature of these items, it does not consider them to be normal operating expenses that are necessary to run the business, or impairments or disposal gains that are expected to arise in the normal course of its operations. Management uses these adjusted financial measures and constant currency metrics internally when reviewing and assessing financial performance.
The Company’s fiscal year ends on the Sunday closest to January 31st of the following year, typically resulting in a 52-week year, but occasionally giving rise to an additional week, resulting in a 53-week year. Fiscal 2023 and 2022 were each 52-week years while 2024 will be a 53-week year. The expected net revenue increase excluding the 53rd week excludes the expected net revenue for the 53rd week of 2024. This enables an evaluation of the expected year-over-year increase in net revenue based on 52 weeks in each year.
The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or with greater prominence to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of Non-GAAP Financial Measures” included in the accompanying financial tables, which includes more detail on the GAAP financial measure that is most directly comparable to each non-GAAP financial measure, and the related reconciliations between these financial measures. The Company’s non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures reported by other companies.
Forward-Looking Statements:
This press release includes estimates, projections, statements relating to the Company’s business plans, objectives, and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In many cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “outlook,” “believes,” “intends,” “estimates,” “predicts,” “potential” or the negative of these terms or other comparable terminology. These forward-looking statements also include the Company’s guidance and outlook statements. These statements are based on management’s current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation: the Company’s ability to maintain the value and reputation of its brand; changes in consumer shopping preferences and shifts in distribution channels; the acceptability of its products to guests; its highly competitive market and increasing competition; increasing costs and decreasing selling prices; its ability to anticipate consumer preferences and successfully develop and introduce new, innovative and updated products; its ability to accurately forecast guest demand for its products; its ability to expand in light of its limited operating experience and limited brand recognition in new international markets and new product categories; its ability to manage its growth and the increased complexity of its business effectively; its ability to successfully open new store locations in a timely manner; seasonality; disruptions of its supply chain; its reliance on a relatively small number of vendors to supply and manufacture a significant portion of its products; suppliers or manufacturers not complying with its Vendor Code of Ethics or applicable laws; its ability to deliver its products to the market and to meet guest expectations if it has problems with its distribution system; increasing labor costs and other factors associated with the production of its products in South Asia and South East Asia; its ability to safeguard against security breaches with respect to its technology systems; its compliance with privacy and data protection laws; any material disruption of its information systems; its ability to have technology-based systems function effectively and grow its e-commerce business globally; climate change, and related legislative and regulatory responses; increased scrutiny regarding its environmental, social, and governance, or sustainability responsibilities; an economic recession, depression, or downturn or economic uncertainty in its key markets; global or regional health events such as the COVID-19 pandemic and related government, private sector, and individual consumer responsive actions; global economic and political conditions; its ability to source and sell its merchandise profitably or at all if new trade restrictions are imposed or existing trade restrictions become more burdensome; changes in tax laws or unanticipated tax liabilities; its ability to comply with trade and other regulations; fluctuations in foreign currency exchange rates; imitation by its competitors; its ability to protect its intellectual property rights; conflicting trademarks and patents and the prevention of sale of certain products; its exposure to various types of litigation; and other risks and uncertainties set out in filings made from time to time with the United States Securities and Exchange Commission and available at www.sec.gov, including, without limitation, its most recent reports on Form 10-K and Form 10-Q. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as may be required by law.
lululemon athletica inc.
The fiscal year ended January 28, 2024 is referred to as “2023” and the fiscal year ended January 29, 2023 is referred to as “2022”. The Company’s next fiscal year ends on February 2, 2025 and is referred to as “2024.”
Condensed Consolidated Statements of Operations
Unaudited; Expressed in thousands, except per share amounts
Fourth Quarter
Fiscal Year
2023
2022
2023
2022
Net revenue
$
3,205,103
$
2,771,838
$
9,619,278
$
8,110,518
Costs of goods sold
1,301,678
1,244,219
4,009,873
3,618,178
Gross profit
1,903,425
1,527,619
5,609,405
4,492,340
As a percentage of net revenue
59.4
%
55.1
%
58.3
%
55.4
%
Selling, general and administrative expenses
989,535
803,107
3,397,218
2,757,447
As a percentage of net revenue
30.9
%
29.0
%
35.3
%
34.0
%
Impairment of goodwill and other assets, restructuring costs
—
407,913
74,501
407,913
Amortization of intangible assets
—
2,173
5,010
8,752
Gain on disposal of assets
—
—
—
(10,180
)
Income from operations
913,890
314,426
2,132,676
1,328,408
As a percentage of net revenue
28.5
%
11.3
%
22.2
%
16.4
%
Other income (expense), net
17,830
3,709
43,059
4,163
Income before income tax expense
931,720
318,135
2,175,735
1,332,571
Income tax expense
262,252
198,324
625,545
477,771
Net income
$
669,468
$
119,811
$
1,550,190
$
854,800
Basic earnings per share
$
5.30
$
0.94
$
12.23
$
6.70
Diluted earnings per share
$
5.29
$
0.94
$
12.20
$
6.68
Basic weighted-average shares outstanding
126,228
127,456
126,726
127,666
Diluted weighted-average shares outstanding
126,584
127,802
127,060
128,017
lululemon athletica inc.
Condensed Consolidated Balance Sheets
Unaudited; Expressed in thousands
January 28,
2024
January 29,
2023
ASSETS
Current assets
Cash and cash equivalents
$
2,243,971
$
1,154,867
Inventories
1,323,602
1,447,367
Prepaid and receivable income taxes
183,733
185,641
Other current assets
309,271
371,578
Total current assets
4,060,577
3,159,453
Property and equipment, net
1,545,811
1,269,614
Right-of-use lease assets
1,265,610
969,419
Goodwill and intangible assets, net
24,083
46,105
Deferred income taxes and other non-current assets
195,860
162,447
Total assets
$
7,091,941
$
5,607,038
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable
$
348,441
$
172,732
Accrued liabilities and other
348,555
399,223
Accrued compensation and related expenses
326,110
248,167
Current lease liabilities
249,270
207,972
Current income taxes payable
12,098
174,221
Unredeemed gift card liability
306,479
251,478
Other current liabilities
40,308
38,405
Total current liabilities
1,631,261
1,492,198
Non-current lease liabilities
1,154,012
862,362
Non-current income taxes payable
15,864
28,555
Deferred income tax liability
29,522
55,084
Other non-current liabilities
29,201
20,040
Stockholders’ equity
4,232,081
3,148,799
Total liabilities and stockholders’ equity
$
7,091,941
$
5,607,038
lululemon athletica inc.
Condensed Consolidated Statements of Cash Flows
Unaudited; Expressed in thousands
Fiscal Year
2023
2022
Cash flows from operating activities
Net income
$
1,550,190
$
854,800
Adjustments to reconcile net income to net cash provided by operating activities
745,974
111,663
Net cash provided by operating activities
2,296,164
966,463
Net cash used in investing activities
(654,132
)
(569,937
)
Net cash used in financing activities
(548,828
)
(467,487
)
Effect of foreign currency exchange rate changes on cash and cash equivalents
(4,100
)
(34,043
)
Increase (decrease) in cash and cash equivalents
1,089,104
(105,004
)
Cash and cash equivalents, beginning of year
$
1,154,867
$
1,259,871
Cash and cash equivalents, end of year
$
2,243,971
$
1,154,867
lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measures
Unaudited; Expressed in thousands, except per share amounts
Constant dollar changes
The below changes in net revenue and comparable sales show the change compared to the corresponding period in the prior year.
Fourth Quarter 2023
Fiscal 2023
NET REVENUE
Increase
Foreign
exchange
Increase in
constant
dollars
Increase
Foreign
exchange
Increase in
constant
dollars
Americas
9
%
—
%
9
%
12
%
—
%
12
%
China Mainland
78
4
82
67
8
75
Rest of World
36
—
36
43
1
44
Total international
54
2
56
54
4
58
Total net revenue
16
%
—
%
16
%
19
%
1
%
20
%
Fourth Quarter 2023
Fiscal 2023
COMPARABLE SALES(1), (2)
Increase
Foreign
exchange
Increase in
constant
dollars
Increase
Foreign
exchange
Increase in
constant
dollars
Americas
7
%
—
%
7
%
8
%
1
%
9
%
China Mainland
56
4
60
39
7
46
Rest of World
32
(1
)
31
32
1
33
Total international
43
1
44
35
4
39
Total comparable sales
12
%
—
%
12
%
13
%
1
%
14
%
Comparable store sales(2)
5
%
1
%
6
%
8
%
1
%
9
%
E-commerce net revenue
17
%
—
%
17
%
17
%
—
%
17
%
__________
(1)
Comparable sales includes comparable company-operated store and e-commerce net revenue.
(2)
Comparable store sales reflects net revenue from company-operated stores that have been open for at least 12 full fiscal months, or open for at least 12 full fiscal months after being significantly expanded. Comparable store sales exclude sales from stores which have been temporarily relocated for renovations or have been temporarily closed.
Adjusted financial measures
The following tables reconcile the most directly comparable measures calculated in accordance with GAAP with the adjusted financial measures. The 2023 and 2022 adjustments relate to certain inventory provisions, goodwill and other asset impairments, and restructuring costs recognized in relation to lululemon Studio, and their related tax effects. The 2022 adjustments also relate to the gain on sale of an administrative office building, and their related tax effects. Please refer to Note 5. Property and Equipment and Note 8. Impairment of Goodwill and Other Assets, Restructuring Costs included in Item 8 of Part II of the Company’s Report on Form 10-K to be filed with the SEC on or about March 21, 2024 for further information on the nature of these amounts.
Fiscal 2023
Gross
Profit
Gross
Margin
Income
from
Operations
Operating
Margin
Income Tax
Expense
Effective
Tax Rate
Net
Income
Diluted
Earnings
Per Share
GAAP results
$
5,609,405
58.3
%
$
2,132,676
22.2
%
$
625,545
28.8
%
$
1,550,190
$
12.20
lululemon Studio charges:
lululemon Studio obsolescence provision
23,709
0.3
23,709
0.2
23,709
0.19
Impairment of assets
44,186
0.5
44,186
0.35
Restructuring costs
30,315
0.3
30,315
0.24
Tax effect of the above
26,085
(0.1
)
(26,085
)
(0.21
)
23,709
0.3
98,210
1.0
26,085
(0.1
)
72,125
0.57
Adjusted results (non-GAAP)
$
5,633,114
58.6
%
$
2,230,886
23.2
%
$
651,630
28.7
%
$
1,622,315
$
12.77
Fourth Quarter 2022
Gross
Profit
Gross
Margin
Income
from
Operations
Operating
Margin
Income Tax
Expense
Effective
Tax Rate
Net
Income
Diluted
Earnings
Per Share
GAAP results
$
1,527,619
55.1
%
$
314,426
11.3
%
$
198,324
62.3
%
$
119,811
$
0.94
lululemon Studio charges:
lululemon Studio obsolescence provision
62,928
2.3
62,928
2.3
62,928
0.49
Impairment of goodwill and other assets
407,913
14.7
407,913
3.19
Tax effect of the above
28,171
(33.6
)
(28,171
)
(0.22
)
62,928
2.3
470,841
17.0
28,171
(33.6
)
442,670
3.46
Adjusted results (non-GAAP)
$
1,590,547
57.4
%
$
785,267
28.3
%
$
226,495
28.7
%
$
562,481
$
4.40
Fiscal 2022
Gross
Profit
Gross
Margin
Income
from
Operations
Operating
Margin
Income Tax
Expense
Effective
Tax Rate
Net
Income
Diluted
Earnings
Per Share
GAAP results
$
4,492,340
55.4
%
$
1,328,408
16.4
%
$
477,771
35.9
%
$
854,800
$
6.68
lululemon Studio charges:
lululemon Studio obsolescence provision
62,928
0.8
62,928
0.8
62,928
0.49
Impairment of goodwill and other assets
407,913
5.0
407,913
3.19
Tax effect of the above
28,171
(7.8
)
(28,171
)
(0.22
)
62,928
0.8
470,841
5.8
28,171
(7.8
)
442,670
3.46
Gain on disposal of assets
(10,180
)
(0.1
)
(10,180
)
(0.08
)
Tax effect of the above
(1,661
)
—
1,661
0.01
Adjusted results (non-GAAP)
$
4,555,268
56.2
%
$
1,789,069
22.1
%
$
504,281
28.1
%
$
1,288,951
$
10.07
Expected net revenue increase excluding the 53rd week
The Company’s fiscal year ends on the Sunday closest to January 31st of the following year, typically resulting in a 52-week year, but occasionally giving rise to an additional week, resulting in a 53-week year. Fiscal 2023 was a 52-week year while 2024 will be a 53-week year.
Fiscal 2024
Expected net revenue increase
11% to 12%
Impact of 53rd week
(1)%
Expected net revenue increase excluding the 53rd week (non-GAAP)
10% to 11%
lululemon athletica inc.
Company-operated Store Count and Square Footage(1)
Square Footage Expressed in Thousands
Number of
Stores Open
at the
Beginning of
the Quarter
Number of
Stores
Opened
During the
Quarter
Number of
Stores Closed
During the
Quarter
Number of
Stores Open
at the End of
the Quarter
1st Quarter 2023
655
10
3
662
2nd Quarter 2023
662
12
2
672
3rd Quarter 2023
672
15
1
686
4th Quarter 2023
686
26
1
711
Total Gross
Square Feet at
the Beginning
of the Quarter
Gross Square
Feet Added
During the
Quarter(2)
Gross Square
Feet Lost
During the
Quarter(2)
Total Gross
Square Feet at
the End of the
Quarter
1st Quarter 2023
2,575
64
7
2,632
2nd Quarter 2023
2,632
64
5
2,691
3rd Quarter 2023
2,691
109
3
2,797
4th Quarter 2023
2,797
173
3
2,967
__________
(1)
Company-operated store count and square footage summary excludes retail locations operated by third parties under license and supply arrangements.
(2)
Gross square feet added/lost during the quarter includes net square foot additions for company-operated stores which have been renovated or relocated in the quarter.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
After a long day at a work event in July, Kathryn Kozody was relieved when she spotted a car with a lit-up taxi sign.
She thought it was odd when the driver told her she’d have to pay her fare with a debit card. Still, a tired Kozody hopped in the car.
“I was like, ‘Fine, it’s kind of weird, but let’s go home,'” said Kozody, who lives in Calgary.
Nothing else seemed off — until the next day when she discovered that almost $2,000 was missing from her bank account. On top of that, her debit card had someone else’s name on it.
Kozody concluded that the taxi driver was a fraudster who, during the debit card transaction, recorded her PIN, stole her card and handed her back a fake.
“I started freaking out,” she said. “It’s terrifying when they have your debit card.”
It took Kozody about two weeks to get her money back from her bank, and she’s still rattled by the experience.
“It really felt like an invasion of privacy and a violation to be a victim of this scam,” she said. “I really don’t want it to happen to anybody else.”
The taxi scam isn’t new; Toronto and Montreal have been seeing it for years. But the crime is becoming more widespread.
This summer, police in Calgary,Edmonton and at least five cities in southern Ontario, including Kingston and Ottawa, posted warnings online that they had received multiple reports of the scam.
Police and the Canadian Taxi Association say the fraudsters have a helping hand: with the click of a button, they can purchase a generic — but official looking — taxi roof sign on e-commerce sites like Amazon.
“They do have a moral responsibility to at least sell the signs to individuals that are properly licensed,” said association president Marc André Way.
However, the U.S.-based company continues to sell the product to all customers.
“These lights are legal to sell in Canada,” Amazon told CBC News in an email.
‘Eye-popping’ numbers
The taxi scam has several variations but typically ends the same way: the victim pays with a debit card, then the scammer secretly steals it and hands the victim a similar but fake card. Shortly thereafter, money disappears from the victim’s account.
Ron Hansen, deputy chief of police in Sarnia, Ont., said his department received 12 reports of the scam in July, with one victim losing $9,900.
Toronto police report that since June 2023 the department has received 919 reports of the taxi scam, totalling $1.7 million in losses.
The numbers are “eye-popping,” said Toronto police detective David Coffey.
“When they do get a victim, they are quick to go right into the bank accounts. They’re quick to empty them out.”
Jessica Chin King of Toronto said just 15 minutes after a recent cab ride, she got a suspicious activity alert from her bank. Turns out, $600 had been withdrawn from her account.
“I was like, ‘Wow, I can’t believe that just happened.’ I was in shock,” said Chin King, whose bank later reimbursed the cash.
She said she too was fooled by the taxi sign atop the car.
“I was in the car with somebody who wasn’t a taxi driver. Anything could have happened,” she said. “I was thankful that it was only my bank [account] that was compromised.”
Taxi light for $35 on Amazon
CBC News bought a taxi sign from Amazon for $35. It has a magnetic strip on the bottom, so it easily sticks to the top of a car.
To power the light, an attached wire can be run through the driver’s window and plugged into the car’s auxiliary power outlet, also known as the cigarette lighter outlet.
The taxi association says licensed taxi drivers typically get their roof signs from speciality suppliers, and they are hardwired to the car — not powered via the cigarette lighter.
“When you see that … it’s obvious that it’s not a legitimate taxi,” said Way, the association president.
“This is not a safe, practical way to distribute the trusted ‘Taxi’ signs,” he wrote.
But Amazon told Way — and CBC News — the signs will remain on its site, because the company isn’t breaking any rules.
“It’s going to be quite difficult, I think, for anyone to stop Amazon from selling a product that is perfectly legal to sell,” said Toronto criminal lawyer, Daniel Goldbloom. “It’s true that these taxi signs can be used to commit scams, but kitchen knives can be used to commit murder — and we don’t stop retailers from selling those.”
But Way isn’t giving up hope.
He says the taxi association also plans to ask other online retailers, such as Temu and eBay, to stop selling the taxi signs and will lobby provincial governments for legislation that regulates the sale of the product.
However, Coffey said he believes the best way to fight the taxi scam is to educate people about it.
“Never, never give another person control of your debit card,” the detective said.
Victims Chin King and Kozody also want to spread the word.
“The more people know, the less likely it is to happen again to somebody else,” Kozody said.