Despite strong sales growth online and at its flagship stores Canadian Tire, retailer Canadian Tire Corp. Ltd. reported a loss in the second quarter, as the impact of store closings during COVID-19 affected performance.
The Toronto-based retailer reported a net loss attributable to shareholders of $ 20 million or 33 cents per share in the second quarter ended June 27, compared with earnings of $ 177.4 million or $ 2.87 per share at the same period last year.
Like many retailers, the company has been forced to close its SportChek, Mark’s and Helly Hansen stores due to public health measures during the pandemic. Canadian Tire stores in Ontario were also closed for most of April, representing 40% of the company’s store footprint.
Overall, retail sales rose 1.7% in the quarter to nearly $ 4.4 billion, led by 20.3% growth in flagship stores, and led by a decline 24.9% sales at SportCheck, 36.4% at Mark’s and 46.4% decline at Gas + locations. Excluding lower oil sales, overall retail sales increased 9.3%.
However, the company’s revenue has lagged, in part because its franchise stores have reduced product orders in response to uncertainty created by the pandemic. The company also faced disruptions in the global supply chain that made it difficult to meet demand for certain items, which also affected revenues.
As retail sales in stores increased, Canadian Tire’s revenue for the quarter declined 14.2% to approximately $ 3.2 billion. The company noted that revenue started to pick up once stores were fully reopened, increasing 24% in June.
Store closings have led many shoppers to turn to e-commerce channels. The company’s online sales increased 400 percent to approximately $ 600 million, surpassing Canadian Tire’s online sales by a quarter for the entire last year.
The company’s spending increased due to COVID-19, with $ 41.2 million in costs related to paying bonuses for frontline workers and increased security measures.
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