Canadian Tire's Q2 profit up even as consumers 'tightened their belts considerably' | Canada News Media
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Canadian Tire’s Q2 profit up even as consumers ‘tightened their belts considerably’

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TORONTO – The head of Canadian Tire Corp. Ltd. says indebted shoppers are cutting back on spending even more — and he doesn’t see that trend turning around quickly.

Greg Hicks, president and chief executive of the housewares and sporting goods retailer, says consumers have “tightened their belts considerably” as the high cost of living continues to pummel their spending power.

“They’re focused on essentials and where they could really get value,” he said on a Thursday call with analysts.

“But the reality is the consumption patterns are less dependent on income level. They’re more dependent on household indebtedness, and indebted households, regardless of income level, are consuming much less, especially in discretionary businesses.”

Consumers with less debt, he said, have more stable spending patterns when it comes to discretionary goods and have even increased their essential purchases.

However, the overall pullback in spending has posed a challenge for Canadian Tire and its SportChek, Mark’s, Pro Hockey Life and Helly Hansen brands for the bulk of this year and some of last.

The company weathered the situation well enough to report a profit attributable to shareholders of $198.8 million or $3.56 per diluted share in its most recent quarter, up from $99.4 million or $1.76 per diluted share a year earlier.

Revenue for the second quarter, which ended June 29, totalled $4.13 billion, down from $4.26 billion in the same quarter last year.

Consolidated comparable sales, however, were down 4.6 per cent.

Comparable sales at the Canadian Tire banner fell 5.6 per cent compared with a year ago, while SportChek stores saw comparable sales edge down 0.9 per cent. Mark’s comparable sales fell 0.8 per cent.

“Although Q2 was not what we wanted in terms of sales, we understand and sympathize with Canadian consumer caution,” Hicks said.

“Ultimately, we don’t control the state of household economics or the weather.”

Weather can be both a benefit and detriment to Canadian Tire. If Mother Nature co-operates with the company’s predictions and product mix for each season, it can power the business to recording a good quarter.

But when temperatures, rainfall and snow levels buck what was anticipated, unexpected demand may crop up for products that are not well-stocked or people might delay purchases altogether if it’s not cold enough to need a parka or sled, for example.

In the second quarter, Hicks said many parts of the country experienced about 50 per cent more cold days and double the days of rain.

Gregory Craig, the company’s chief financial officer, added the weather was “unseasonably cold,” particularly in western provinces like Alberta, where it snowed in mid-June.

“With cold and wet weather, fewer people came to the store for categories such as gardening and watering,” Craig said on the same call as Hicks.

“Sales in home environment categories including air purifiers and air conditioners were also down compared to last year, when we were experiencing higher temperatures in many parts of the country.”

To cope with the shifts, Hicks said, “we controlled what we could.”

That meant turning to the brand’s Triangle rewards program to spur loyalty and recurring revenue. The plan worked so well that sales linked to the loyalty program outperformed those made by customers without Triangle.

Irene Nattel, an analyst with RBC Capital Markets, took such moves as a sign that Canadian Tire has “strong hands at the wheel.”

The company’s quarter was “better than expected despite the challenging backdrop” and “underscores the reasonably defensive nature” of Canadian Tire’s retail operations, she told clients in a note.

The market reacted to the results by pushing up Canadian Tire’s share price by $10.68, or 7.7 per cent, to close at $148.71 on Thursday.

Moving forward, Craig said Canadian Tire does not expect to see softer consumer demand reverse immediately.

As a result, Canadian Tire will be “managing down” its inventory, said TJ Flood, the president of Canadian Tire’s retail division.

The company will also lean more into essentials, which tend to reign supreme in the fourth quarter, and categories like automotive, household cleaning and pet supplies, he said.

This report by The Canadian Press was first published Aug. 8, 2024.

Companies in this story: (TSX:CTC.A, TSX:CTC)

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Virginia Democrats advance efforts to protect abortion, voting rights, marriage equality

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RICHMOND, Va. (AP) — Democrats who control both chambers of the Virginia legislature are hoping to make good on promises made on the campaign trail, including becoming the first Southern state to expand constitutional protections for abortion access.

The House Privileges and Elections Committee advanced three proposed constitutional amendments Wednesday, including a measure to protect reproductive rights. Its members also discussed measures to repeal a now-defunct state constitutional ban on same-sex marriage and ways to revise Virginia’s process to restore voting rights for people who served time for felony crimes.

“This meeting was an important next step considering the moment in history we find ourselves in,” Democratic Del. Cia Price, the committee chair, said during a news conference. “We have urgent threats to our freedoms that could impact constituents in all of the districts we serve.”

The at-times raucous meeting will pave the way for the House and Senate to take up the resolutions early next year after lawmakers tabled the measures last January. Democrats previously said the move was standard practice, given that amendments are typically introduced in odd-numbered years. But Republican Minority Leader Todd Gilbert said Wednesday the committee should not have delved into the amendments before next year’s legislative session. He said the resolutions, particularly the abortion amendment, need further vetting.

“No one who is still serving remembers it being done in this way ever,” Gilbert said after the meeting. “Certainly not for something this important. This is as big and weighty an issue as it gets.”

The Democrats’ legislative lineup comes after Republican Governor Glenn Youngkin, to the dismay of voting-rights advocates, rolled back a process to restore people’s civil rights after they completed sentences for felonies. Virginia is the only state that permanently bans anyone convicted of a felony from voting unless a governor restores their rights.

“This amendment creates a process that is bounded by transparent rules and criteria that will apply to everybody — it’s not left to the discretion of a single individual,” Del. Elizabeth Bennett-Parker, the patron of the voting rights resolution, which passed along party lines, said at the news conference.

Though Democrats have sparred with the governor over their legislative agenda, constitutional amendments put forth by lawmakers do not require his signature, allowing the Democrat-led House and Senate to bypass Youngkin’s blessing.

Instead, the General Assembly must pass proposed amendments twice in at least two years, with a legislative election sandwiched between each statehouse session. After that, the public can vote by referendum on the issues. The cumbersome process will likely hinge upon the success of all three amendments on Democrats’ ability to preserve their edge in the House and Senate, where they hold razor-thin majorities.

It’s not the first time lawmakers have attempted to champion the three amendments. Republicans in a House subcommittee killed a constitutional amendment to restore voting rights in 2022, a year after the measure passed in a Democrat-led House. The same subcommittee also struck down legislation supporting a constitutional amendment to repeal an amendment from 2006 banning marriage equality.

On Wednesday, a bipartisan group of lawmakers voted 16-5 in favor of legislation protecting same-sex marriage, with four Republicans supporting the resolution.

“To say the least, voters enacted this (amendment) in 2006, and we have had 100,000 voters a year become of voting age since then,” said Del. Mark Sickles, who sponsored the amendment as one of the first openly gay men serving in the General Assembly. “Many people have changed their opinions of this as the years have passed.”

A constitutional amendment protecting abortion previously passed the Senate in 2023 but died in a Republican-led House. On Wednesday, the amendment passed on party lines.

If successful, the resolution proposed by House Majority Leader Charniele Herring would be part of a growing trend of reproductive rights-related ballot questions given to voters. Since 2022, 18 questions have gone before voters across the U.S., and they have sided with abortion rights advocates 14 times.

The voters have approved constitutional amendments ensuring the right to abortion until fetal viability in nine states: Arizona, California, Colorado, Maryland, Michigan, Missouri, Montana, Ohio and Vermont. Voters also passed a right-to-abortion measure in Nevada in 2024, but it must be passed again in 2026 to be added to the state constitution.

As lawmakers debated the measure, roughly 18 members spoke. Mercedes Perkins, at 38 weeks pregnant, described the importance of women making decisions about their own bodies. Rhea Simon, another Virginia resident, anecdotally described how reproductive health care shaped her life.

Then all at once, more than 50 people lined up to speak against the abortion amendment.

“Let’s do the compassionate thing and care for mothers and all unborn children,” resident Sheila Furey said.

The audience gave a collective “Amen,” followed by a round of applause.

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Associated Press writer Geoff Mulvihill in Cherry Hill, New Jersey, contributed to this report.

___

Olivia Diaz is a corps member for The Associated Press/Report for America Statehouse News Initiative.

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Vancouver Canucks winger Joshua set for season debut after cancer treatment

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Vancouver Canucks winger Dakota Joshua is set to make his season debut Thursday after missing time for cancer treatment.

Head coach Rick Tocchet says Joshua will slot into the lineup Thursday when Vancouver (8-3-3) hosts the New York Islanders.

The 28-year-old from Dearborn, Mich., was diagnosed with testicular cancer this summer and underwent surgery in early September.

He spoke earlier this month about his recovery, saying it had been “very hard to go through” and that he was thankful for support from his friends, family, teammates and fans.

“That was a scary time but I am very thankful and just happy to be in this position still and be able to go out there and play,,” Joshua said following Thursday’s morning skate.

The cancer diagnosis followed a career season where Joshua contributed 18 goals and 14 assists across 63 regular-season games, then added four goals and four assists in the playoffs.

Now, he’s ready to focus on contributing again.

“I expect to be good, I don’t expect a grace period. I’ve been putting the work in so I expect to come out there and make an impact as soon as possible,” he said.

“I don’t know if it’s going to be perfect right from the get-go, but it’s about putting your best foot forward and working your way to a point of perfection.”

The six-foot-three, 206-pound Joshua signed a four-year, US$13-million contract extension at the end of June.

This report by The Canadian Press was first published Nov. 14, 2024.

The Canadian Press. All rights reserved.

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Trump chooses anti-vaccine activist Robert F. Kennedy Jr. as health secretary

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NEW YORK (AP) — President-elect Donald Trump says he will nominate anti-vaccine activist Robert F. Kennedy Jr. to lead the Department of Health and Human Services, putting him in charge of a massive agency that oversees everything from drug, vaccine and food safety to medical research and the social safety net programs Medicare and Medicaid.

“For too long, Americans have been crushed by the industrial food complex and drug companies who have engaged in deception, misinformation, and disinformation when it comes to Public Health,” Trump said in a post on his Truth Social site announcing the appointment. Kennedy, he said, would “Make America Great and Healthy Again!”

Kennedy, a former Democrat who ran as an independent in this year’s presidential race, abandoned his bid after striking a deal to give Trump his endorsement with a promise to have a role in health policy in the administration.

He and Trump have since become good friends, with Kennedy frequently receiving loud applause at Trump’s rallies.

The expected appointment was first reported by Politico Thursday.

A longtime vaccine skeptic, Kennedy is an attorney who has built a loyal following over several decades of people who admire his lawsuits against major pesticide and pharmaceutical companies. He has pushed for tighter regulations around the ingredients in foods.

With the Trump campaign, he worked to shore up support among young mothers in particular, with his message of making food healthier in the U.S., promising to model regulations imposed in Europe. In a nod to Trump’s original campaign slogan, he named the effort “Make America Healthy Again.”

It remains unclear how that will square with Trump’s history of deregulation of big industries, including food. Trump pushed for fewer inspections of the meat industry, for example.

Kennedy’s stance on vaccines has also made him a controversial figure among Democrats and some Republicans, raising question about his ability to get confirmed, even in a GOP-controlled Senate. Kennedy has espoused misinformation around the safety of vaccines, including pushing a totally discredited theory that childhood vaccines cause autism.

He also has said he would recommend removing fluoride from drinking water. The addition of the material has been cited as leading to improved dental health.

HHS has more than 80,000 employees across the country. It houses the Food and Drug Administration, the Centers for Disease Control and Prevention, the Medicare and Medicaid programs and the National Institutes of Health.

Kennedy’s anti-vaccine nonprofit group, Children’s Health Defense, currently has a lawsuit pending against a number of news organizations, among them The Associated Press, accusing them of violating antitrust laws by taking action to identify misinformation, including about COVID-19 and COVID-19 vaccines. Kennedy took leave from the group when he announced his run for president but is listed as one of its attorneys in the lawsuit.

__ Seitz reported from Washington.

The Canadian Press. All rights reserved.

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