Canadian Tire (TSE:CTC) reported second-quarter 2026 normalized diluted earnings per share of C$3.94, up 10% from a year earlier, as growth at SportChek and Mark’s, cost discipline and improved retail margins helped offset weather-related pressure at its flagship Canadian Tire Retail banner.
President and CEO Greg Hicks said the operating environment remained challenging, marked by soft consumer sentiment, higher food and gas prices and inconsistent spring and summer weather. Wet conditions particularly affected outdoor demand at Canadian Tire Retail, while Mark’s and SportChek posted stronger comparable sales.
Sales results varied by banner
Consolidated retail sales and revenue increased during the quarter, with petroleum sales benefiting from higher gas prices despite lower fuel volumes. Excluding petroleum, retail sales rose 2.5%, while comparable sales across the company increased 0.7%.
- SportChek comparable sales rose 8%, supported by strategic inventory investments tied to major sporting events. World Cup merchandise accounted for about half of the banner’s growth, while Montreal Canadiens fan wear and athletic footwear also contributed.
- Mark’s comparable sales increased 4.2%, led by industrial footwear, workwear and rainwear. The company said its newer BBB store format outperformed, aided by denim and casual-work category sales.
- Canadian Tire Retail comparable sales declined 0.8% from 2025, though they were up 5.5% on a two-year stacked basis. Gardening and summer climate-control categories were weaker, especially in Alberta and Ontario, where weather was inconsistent.
Chief Operating Officer TJ Flood said weather-related categories accounted for more than the entire year-over-year decline at Canadian Tire Retail when related categories were included. The company said its non-weather businesses were up during the quarter.
Canadian Tire Retail did see positive activity in patio and barbecue, automotive, fixing and playing categories. Tire-change activity helped support the company’s 24th consecutive quarter of automotive growth, according to Chief Financial Officer Darren Myers.
Canadian Tire Retail revenue fell 3.5%, reflecting slower sell-through and lower dealer restocking. Dealer inventory ended the quarter up 1%, primarily in seasonal categories, and Myers said sell-through improved after quarter-end as summer weather became more widespread.
Margins and expense discipline support earnings
Retail gross margin, excluding petroleum, was 35.1%, an improvement of 33 basis points from the prior year. Myers attributed the gain to favorable contributions from SportChek and Mark’s as well as the company’s promotional and pricing tools.
Flood said Canadian Tire Retail’s underlying margin rate was only modestly below the prior-year level. The company cut regular prices on more than 5,000 products, including essential categories such as cleaning and storage, using its DaiVID artificial-intelligence pricing analysis.
Retail selling, general and administrative expense declined C$10 million year over year. Savings from restructuring, lower variable compensation and a shift of some marketing expenses into the third quarter helped offset higher real-estate and store-operating costs. Retail income before taxes increased 1.2% to C$201 million, while normalized retail EBITDA rose 2.2% to C$498 million.
Myers said the company expects some third-quarter margin pressure from transportation fuel surcharges and targeted investments, but continues to target a full-year gross margin rate above 35%, excluding petroleum.
Bank metrics remain stable amid consumer pressure
Canadian Tire Financial Services reported gross average receivables growth of 4.2%, driven by higher cardholder retention, more active accounts and increased average balances. The financial-services business reported stable credit metrics despite elevated insolvencies.
The net write-off rate was about 7.2%, while aging remained flat year over year at 3.3%. The allowance for credit losses remained C$935 million, representing 11.8% of ending receivables.
Myers said the reserve was adequate based on consumer payment patterns and other inputs used in expected-credit-loss calculations. Financial-services SG&A increased as planned and is expected to continue at an annualized rate of about 28% through the second half as the company invests in acquisition, customer engagement and projects.
True North strategy emphasizes digital, loyalty and customer occasions
Management highlighted continued work under its True North strategy, including store modernization, digital commerce, loyalty partnerships and the use of AI-based customer data.
The company completed 30 store-refresh projects in the first half and expects to more than double that number by year-end, though it now expects fewer than the 70 projects originally planned because of timing shifts. Capital spending is now expected to be C$450 million to C$500 million in 2026. Canadian Tire also repurchased C$85 million of shares in the second quarter.
E-commerce comparable sales rose 12%, with Canadian Tire Retail e-commerce sales up 14%. Hicks said free ship-to-home service for Triangle members, launched in May with a C$99 threshold, has helped drive demand. Flood said online conversion increased and average order value was nearly double that of brick-and-mortar transactions. Click-and-collect and paid same-day delivery also grew.
Canadian Tire is also working to link its banner websites more closely, with plans for integrated search, cart and payment functions. Hicks said the initial phase enables customers to move between Canadian Tire, Mark’s and SportChek websites more easily.
On loyalty, more than 2 million Triangle members are active with partners including Petro-Canada, RBC and WestJet. Hicks said a Tims Rewards partnership is expected to launch within weeks, allowing members to earn Canadian Tire Money through daily coffee purchases.
The company is using its MOSaiC customer intelligence platform for an enterprise-wide back-to-school initiative, seeking to identify assortment and pricing gaps across its banners. Hicks said the company has added products including C$500 Chromebooks and miniature dorm-room fans, and views back-to-school as a C$3.4 billion Canadian market where it currently has a low-double-digit share.
Looking ahead, Myers said the company has seen encouraging sales growth early in the third quarter as summer weather arrived, though management noted that consumer conditions remain dynamic. Canadian Tire continues to plan for growth in the second half of 2026 on a 52-week basis.
About Canadian Tire (TSE:CTC)
Canadian Tire Corporation, Limited, (TSX: CTC.A) (TSX: CTC) or ‘CTC’, is a group of companies that includes a Retail segment, a Financial Services division and CT REIT. Our retail business is led by Canadian Tire, which was founded in 1922 and provides Canadians with products for life in Canada across its Living, Playing, Fixing, Automotive and Seasonal & Gardening divisions. Party City, PartSource and Gas+ are key parts of the Canadian Tire network. The Retail segment also includes Mark’s, a leading source for casual and industrial wear; Pro Hockey Life, a hockey specialty store catering to elite players; and SportChek, Hockey Experts, Sports Experts and Atmosphere, which offer the best active wear brands.
