By Adriano Marchese
Canadian Tire swung to a loss in the third quarter, reflecting a charge related to acquisition of its financial service arm stake, while revenue rose slightly as consumers tighten their spending.
The Canadian retail company reported on Thursday a loss of 27.8 million Canadian dollars ($20.2 million), or C$1.19 a share, compared with a profit of C$225 million, or C$3.14 a share, in the comparable quarter a year ago.
The company said the swing reflected a change in fair value charge of C$328 million related to its acquisition of Bank of Nova Scotia’s 20% stake in Canadian Tire Financial Services in late October.
Normalized earnings, an adjusted figure, came in at C$2.96 a share. According to FactSet, analysts were expecting C$3.29 a share.
Revenue inched forward to C$4.25 billion from C$4.23 billion, beating analyst expectations for a slight decline to C$4.18 billion.
Canadian Tire said consumer demand has been softening, and in the quarter it saw consumers shift their purchases toward essentials. As a result, consolidated comparable sales were down 1.6%.
At the end of October, Canadian Tire regained full ownership of its financial-services arm after acquiring the stake from the Canadian bank for C$895 million. The company said it would gain greater flexibility to deliver more value to its 11 million active loyalty members, including 2.3 million credit-card holders.
Write to Adriano Marchese at [email protected]
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