Those struggles prompted Canadian Tire Corp. Ltd. to withdraw its sales growth target on Thursday amid a drop in earnings and revenue.
"With 10 interest rate hikes in less than 18 months and persistent inflation impacting the cost of living and leading to reduced savings cushions, Canadian consumers are experiencing increased financial strain and facing tougher spending decisions." But he said there's probably been a pullback for nice-to-have things such as camping and gardening equipment, or sporting goods.
In the three months ended July 1, the Toronto-based retail giant said net income attributable to shareholders fell 32 per cent to $99.4 million from $145.2 million in the same period a year earlier. The 101-year-old company said revenue in its second quarter fell three per cent to $4.26 billion from $4.40 billion the previous year.
The Bank of Canada hiked its key interest rate by another quarter of a percentage point last month, bringing it to five per cent — the highest it's been since 2001. That forecast also included diluted earnings per share of at least $26 and retail return on invested capital of more than 15 per cent by 2025. Canadian Tire cautioned investors when it released those targets in March 2022 that risks to its financial aspirations included a"decline in economic growth, consumer confidence, household spending and other market disruptions."