Canadian Tire Corporation Delivers Strong Top Line and Earnings Growth in Q4 and Full Year 

On February 13, Canadian Tire Corporation, Limited released fourth quarter and full year results for the period ended December 28, 2019. Driven by strong sales at Canadian Tire, the company posted increased comparable sales in the fourth quarter and the full year.

“We had an exceptionally strong Q4 that capped off a solid last half of 2019. Through our Triangle Rewards program, customers are engaging with us more frequently, both in our stores and digitally, driving our topline growth as well as making us one of Canada’s largest eCommerce players,” said Stephen Wetmore, president and CEO, Canadian Tire Corporation. “I have to commend the Canadian Tire Retail team who posted exceptional comparable store growth of 4.8% in the quarter. Our ability to deliver remarkably consistent growth at CTR is due to our strong partnership with our Associate Dealers and their knowledge of our customers’ expectations in virtually every community in Canada .”

“I am very confident our One Company, One Customer strategy, underpinned by our current suite of assets and growing momentum towards our $200 million Operational Efficiency target, is creating the change at CTC that positions us to compete and create long-term sustainable growth,” continued Wetmore.

Highlights from the results:

  • Consolidated comparable sales up 3.9% in the fourth quarter, and 3.6% for the full year, led by exceptional results at Canadian Tire
  • Fourth quarter consolidated revenue of $4.3 billion, up 4.5%, up 5.1% excluding Petroleum; 2019 annual revenue of $14.5 billion, up 3.4%, up 5.0% excluding Petroleum
  • Financial Services GAAR growth up 7.4% and revenue up 5.9% for 2019
  • Fourth quarter diluted earnings per share (EPS) was $5.42; normalized diluted EPS was $5.53, an increase of 15.7%
  • Full year diluted EPS was $12.58; normalized diluted EPS was $13.04, an increase of 9.1%

For the full report visit: Yahoo Finance

 

Walmart Earnings and Outlook Fall Short as Holiday Season Disappoints

On February 18, Walmart reported fiscal fourth-quarter earnings that fell short of analysts’ estimates, as the retailer saw weak demand for toys, apparel and video games during the holiday season. Its outlook for the upcoming year also came up short of expectations, as Walmart anticipates e-commerce growth will slow. 

Walmart said the forecast doesn’t include any impact from the deadly coronavirus outbreak, though it continues to monitor the situation, and said it could end up taking a hit in China in the first and second quarters. Political unrest in Chile, where protests have caused disruption in Walmart stores in the region, also weighed on its results in the latest quarter.

Here’s what the company reported compared with what analysts were expecting  for Walmart’s fiscal fourth quarter, based on Refinitiv data:

  • Earnings per share: $1.38, adjusted, vs. $1.43 expected
  • Revenue: $141.67 billion vs. $142.49 billion expected
  • Same-store sales: up 1.9% in the U.S. vs. growth of 2.3% expected

“We thank our associates for another good year. In Q4, we saw strong performance in the U.S. with eCommerce and Sam’s Club plus strength in Mexico, India and China. We started and finished the quarter with momentum, while sales leading up to Christmas in our U.S. stores were a little softer than expected. 

The new year has started off well, and we look forward to another strong year. We remain focused on providing our customers with the best omnichannel experience from any retailer, ” said Doug McMillon, president and CEO, Walmart.

Q4 Highlights:

  • Total revenue was $141.7 billion, an increase of $2.9 billion, or 2.1%.
  • Net Income was $4.14 billion compared with $3.69 billion in 2018
  • Walmart U.S. eCommerce had strong growth in grocery pickup and delivery, and walmart.com had its highest quarterly growth rate of the year.
  • Net sales at Walmart International were $33.0 billion, an increase of 2.3%. Disruption in Chile negatively affectedoperating income by approximately $110 million.
  • Transactions at Walmart stores in the U.S. were up 1% during the quarter, but that was lower than the 1.5% a year earlier.
  • The average ticket was up just 0.9%, compared with ticket growth of 2.6% a year earlier.
  • Adjusted EPS2 excludes the effects of four items:
    • An unrealized gain of $0.26, net of tax, on the company’s equity investment in JD.com
    • A charge of $0.15, net of tax, related to business restructurings
    • A tax benefit of $0.11 related to a reduction in corporate income tax rates in India
    • A charge of $0.15 related to certain income tax matters

Full Year Highlights

  • Total revenue was $524.0 billion, an increase of $9.6 billion, or 1.9%. Excluding currency, total revenue was $528.1 billion, an increase of $13.7 billion, or 2.7%.
  • Walmart U.S. comp sales increased 2.8% and 6.4% on a two-year stacked basis.
  • Walmart U.S. eCommerce sales grew 37%. Net Promoter Score and the Customer Value Index improved.
  • International net sales increased 2.8% in constant currency with strength in Mexico, China and India.
  • The company generated $25.3 billion in operating cash flow and returned $11.8 billion to shareholders through dividends and share repurchases.

Walmart shares are up nearly 18% over the past 12 months. It has a market value of roughly $334.2 billion.

Source: CNBC
Source: Walmart, Walmart

 

The Home Depot Announces Fourth Quarter and Fiscal 2019 Results; Reiterates Fiscal 2020 Business Outlook; Increases Quarterly Dividend by 10 Percent

On February 25, The Home Depot, the world’s largest home improvement retailer, reported fourth quarter and fiscal 2019 results.

“Fiscal 2019 was a record year for our business and one marked by significant progress as we invest to transform ourselves into The Home Depot of the future. We had a strong finish to the year as our fourth quarter results reflect strength in our core business, solid execution around our holiday events and the overall health of the consumer,” said Craig Menear, chairman, CEO and president.

“We are now two years into our multi-year investment program and have more conviction than ever that our strategic initiatives are creating a value proposition that is unique to the marketplace and will extend our leadership position for years to come. Through the second year of our One Home Depot investment program, we have grown sales by over $9 billion dollars – a level of growth unmatched in our market. I am proud of the way our associates continue to focus on our customers, and I want to thank them for their hard work and dedication in the fourth quarter and throughout the year.”

Fourth Quarter 2019

  • Comparable sales for the fourth quarter of fiscal 2019 increased 5.2%,
  • Sales for the fourth quarter of fiscal 2019 were $25.8 billion compared to sales of $26.5 billion in the fourth quarter of fiscal 2018. 
  • Fiscal 2018 included an extra week of operations compared to fiscal 2019. The extra week of operations added approximately $1.7 billion of sales to the fourth quarter of fiscal 2018.
  • Net earnings for the fourth quarter of fiscal 2019 were $2.5 billion, or $2.28 per diluted share, compared to net earnings of $2.3 billion, or $2.09 per diluted share, in the fourth quarter of fiscal 2018. The extra week of operations added approximately $0.21 per diluted share to the fourth quarter of fiscal 2018.

Fiscal 2019

  • Comparable sales for fiscal 2019 increased 3.5%.
  • Sales for fiscal 2019 were $110.2 billion compared to sales of $108.2 billion in fiscal 2018.
  • Net earnings for fiscal 2019 were $11.2 billion, or $10.25 per diluted share, compared to net earnings of $11.1 billion, or $9.73 per diluted share in fiscal 2018.

Dividend Declaration

The Company today announced that its board of directors approved a 10%  increase in its quarterly dividend to $1.50 per share, which equates to an annual dividend of $6.00 per share. The dividend is payable on March 26, 2020, to shareholders of record on the close of business on March 12, 2020. This is the 132nd consecutive quarter the Company has paid a cash dividend.

Fiscal 2020 Guidance 

The Company provided the following guidance for fiscal 2020:

  • Total sales growth of approximately 3.5% to 4.0%
  • Comparable sales growth of approximately 3.5% to 4.0%
  • Six new stores
  • Operating margin of approximately 14.0%
  • Net interest expense of approximately $1.2 billion
  • Effective tax rate assumption of approximately 24.0%
  • Share repurchases of at least $5.0 billion
  • Diluted earnings-per-share growth of approximately 2.0% to $10.45
  • Capital spending of approximately $2.8 billion
  • Depreciation and amortization expense of approximately $2.4 billion
  • Cash flow from operations of approximately $13.5 billion

Source: Yahoo News

 

Shoppers Drug Mart Leads Growth as Loblaw Reports Profit

Loblaw Companies Ltd. raked in a $254 million profit in the fourth quarter of 2019, up from last year, with Shoppers Drug Mart leading the way in terms of growth for the retailer. Data was released on February 20 and the company said that net earnings increased to $254 million, or 70 cents per diluted share, for the 12-week period ending Dec. 28, up from $221 million, or $59 cents per diluted share, in 2018.

When it came to same-store sales, a key metric in the retail industry, Shoppers Drug Mart posted a 3.6% increase, the most significant growth for the company. That growth is partly due to a jump in the number of prescriptions being dispensed.

“Shoppers delivered another impressive quarter with continued leadership in beauty, strong performance in cold and flu and the best pharmacy (same-store sales) that we’ve seen in five years,” Sarah Davis, president at Loblaw, told analysts on a conference call Thursday.

Loblaw’s grocery business, which makes up more than 70% of its sales, saw same-store sales growth increase 1.9% in the quarter. However, when the impact of Thanksgiving – a significant shopping event that is usually in the third quarter – was taken out of the equation, same-store sales were up a more moderate 0.8%.

While Loblaw saw strong sales overall, the company said sales in the apparel and general merchandise categories, including home items, have been weak as more customers go online to purchase those products. Darren Myers, the company’s chief financial officer, said the company has deployed several strategies to address the weaker sales, which have been impacting not only Loblaw but the broader retail industry. He also said the retailer plans to move more of those products online.

“We like being in the general merchandise and apparel businesses, but when you consider our suite of stores, we have over 2,000 stores and GM and apparel is a very small portion of those,” Davis said, adding that the categories do not have a “significant impact” on overall sales.

Loblaw also said Thursday that the anti-pipeline blockades that have brought rail traffic across the country to a halt has not affected the company’s performance as it moves more goods via truck. Davis did not feel that this would have a big impact on performance for the next quarter.

Source: Yahoo Finance

 

Lowe’s Fourth-Quarter Sales, Outlook for Fiscal 2020 Fall Short of Estimates

On February 26 Lowe’s reported mixed fourth-quarter results, with sales weaker than expected, and provided a disappointing forecast. Share prices rose 1.4% in premarket trading.

The home improvement retailer is undergoing a turnaround under Chief Executive Marvin Ellison, who stepped into the role in 2018. As part of the transformation, Lowe’s is focused on expanding e-commerce and attracting more professional homebuilders and contractors. It’s also trying to capitalize on existing strengths, such as speeding up appliance deliveries since it’s one of the country’s top appliance retailers.

Fourth Quarter Highlights

  • Net income of $509 million, or 66 cents per share, compared with a loss of $824 million, or $1.03 per share, a year ago.
  • Excluding items, the company earned 94 cents per share, outpacing analyst estimates of 91 cents per share from Refinitiv.
  • Revenue rose to $16.03 billion from $15.65 billion a year ago but was less than the $16.15 billion analysts had forecasted.
  • Same-store sales grew by 2.5%, vs the 3.6% analysts expected.

In a news release, Ellison said the company is making strides in stores and with its overhaul of Lowes.com. “Though we are only one year into a multi-year plan, we made significant progress transforming our company and believe we are well positioned to capitalize on solid demand in a healthy home improvement market,” he said.

To lift sales, he said Lowe’s needs to win new customers from Home Depot and other stores, step up its seasonal offerings and quickly catch up with the digital side of the business. Ellison commended some of the company’s changes, including adding a permanently staffed desk and dedicated parking spaces for professional contractors. “However, it is also clear that the transformation will take at least another year and a bit before it fully delivers,” he said.

Lowe’s said it expects to have sales growth of 2.5% to 3% and same-store sales growth of 3% to 3.5% in fiscal 2020. It forecast that earnings will be $6.45 to $6.65 per share in fiscal 2020 on an adjusted basis. According to Refinitiv, analysts were expecting the retailer to earn $6.34 to $6.92 per share.

Along with efforts to revamp its online business, Lowe’s named Marisa Thalberg its new chief brand and marketing officer in January. Thalberg, previously global chief brand officer at Taco Bell, reports directly to Ellison. Lowe’s plans to hire more than 53,000 full-time and part-time employees for the spring, which is the busiest season for home improvement projects.

Source: CNBC