- Many consumers are pulling back on spending as prices rise higher, but the story isn’t the same across all retailers
- Canadian Tire Corp. (TSX:CTC) shares climbed after the company reported top-line sales increased 1.2 per cent to $5.73 billion
- Nordstrom Inc. (NYSE:JWN) lost around 20 per cent of its value since this time last year
- Nordstrom made headlines after announcing that it is shuttering is Canadian operations by June 2023
- Nordstrom joins the likes of Walmart Inc. (NYSE:WMT), Amazon.com Inc (NASDAQ:AMZN), and Poshmark Inc. (NASDAQ:POSH) to lay off large portions of its work force as it closes stores
Many consumers are pulling back on spending as prices rise higher, but the story isn’t the same across all retailers.
Canadian Tire Corp. (TSX:CTC) shares climbed after the company reported a normalized profit of $9.34 per diluted share in its recent Q4 and full-year results. This represented 11 per cent growth, driven mainly by higher revenue in both retail and financial services and a higher retail gross margin.
Top-line sales increased 1.2 per cent from the same period last year to $5.73 billion in the quarter ended Dec. 31.
Full-year 2022 consolidated comparable sales for the retail segment were up 2.7 per cent, and Q4 was in line with 2021’s exceptional performance when comparable sales were up 11.3 per cent. Q4 diluted earnings per share was a record $9.09, up 9 per cent compared to Q4 2021.
More than $750 million of capital was returned to shareholders in the fiscal year 2022, and $850 million was invested in total capital expenditures. The Toronto-based company operates a franchise model and reported that store dealers’ revenue grew almost four per cent to $5.34 billion.
CTC stock has rallied nearly 10 per cent over the last three months, and year-to-date, its stock is up more than 20 per cent.
Canadian Tire’s President and CEO, Greg Hicks, said this record performance demonstrates resilience through what he called “a dynamic economic environment.”
“In 2023, we will continue to focus on delivering value to our customers through the unique capabilities of our Owned Brands, multi-category assortment, and triangle rewards,” he said. “With these assets and the resilience of our brand, people and better-connected strategy, we are better positioned than ever to compete and win.”
On the flip side, Nordstrom Inc. (NYSE:JWN) has lost around 20 per cent of its value since this time last year, and the news only got worse for the fashion retailer after delivering mixed Q4 financial results.
Last week, Nordstrom reported quarterly earnings of 74 cents per share, which beat the analyst estimates of 66 cents.
The company also released quarterly sales of $4.20 billion, which missed the estimates of $4.34 billion, which represents a 4.2 per cent decrease over sales of $4.38 billion in the same period last year.
Down 25 per cent in the last month, Nordstrom made headlines after announcing last week that it is shuttering its Canadian operations by June 2023. Nordstrom shared with investors that its fiscal 2023 adjusted earnings per share is in the $1.80 to $2.20 range versus analyst estimates of $1.62.
The company’s CEO, Erik Nordstrom, said that winding down operations in Canada was necessary to simplify operations and focus on driving growth in its core U.S. business.
“As we enter fiscal 2023, we are focused on enhancing the customer experience, improving Nordstrom Rack performance, increasing inventory productivity, and continuing to advance our supply chain optimization initiatives. We remain confident in the strength of our brands and our ability to drive profitable growth and deliver long-term value to our shareholders.”
Roughly 2,500 employees will be cut as a result.
Blaming the struggle to profitability, Nordstrom joins the likes of Walmart Inc. (NYSE:WMT), Amazon.com Inc (NASDAQ:AMZN), and Poshmark Inc. (NASDAQ:POSH) to lay off large portions of its workforce as it closes stores.
Since the beginning of the year, major retailers ranging from department stores to direct-to-consumer brands have let go of staff, the latest blow to a sector that has been enduring significant labour challenges and rising costs tied to inflation.