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Highlights
- The S&P/TSX Capped Consumer Discretionary Index has surged by more than 16 per cent on a year-to-date (YTD) basis.
- A Canadian retail giant clocked a new one-year high stock price of C$ 330 apiece on November 11 after its latest earnings report came out.
- This retail company has posted increased retail sales of C$ 188.8 million in the third quarter of fiscal 2021.
The COVID-19 outbreak has significantly hampered the global retail infrastructure, with lockdown rules and social distancing norms being some of the major challenges. In addition, regular sanitization and capacity limits in physical stores increased the overall cost of retail businesses.
However, some retail players have made it out the COVID-19 mayhem with lesser scratches than others, and have even started noting increased sales.
With the world of retail slowly inching towards normalcy, the S&P/TSX Capped Consumer Discretionary Index has surged by more than 16 per cent on a year-to-date (YTD) basis.
One of the major retail chains in Canada recently announced its latest quarterly report, where it announced increased sales as well as a surge for the 12th consecutive year in its annual dividend.
The company we are talking about is Canadian Tire Corporation (TSX:CTC), which has hiked its yearly dividend payout by more than 10 per cent.
How Canadian Tire’s (TSX: CTC) stock performance shone over the past year
Since starting off as a small tire business in 1922, Canadian Tire Corporation has now grown to become a major retail network that sells home goods, clothing, sports equipment, and a range of other things.
In the wake of its latest earnings report’s release, the Toronto-headquartered franchise saw its stock clock a new one-year high of C$ 330 apiece on Thursday, November 11.
Image source: © 2021 Kalkine Media Inc
The retail stock has also grown by about 32 per cent in the past three months and spiked by nearly 29 per cent in the last six months.
CTC scrips delivered a return of almost 55 per cent over the past 12 months, while its year-to-date (YTD) gain stood at roughly 59 per cent.
On Friday, November 12, Canadian Tire noted a price-to-earnings ratio of 15, a price-to-book ratio of 4.253 and a return on equity of 27.26 per cent.
Canadian Tire’s retail sales surged to C$ 188.8 million in Q3 2021
Canadian Tire Corporation saw its retail sales expand to C$ 188.8 million in the third quarter of fiscal 2021, noting a year-over-year (YoY) rise of 4.3 per cent. Excluding petroleum, its retail sales marked a YoY surge of 1.6 per cent.
While the retail giant’s consolidated revenue slipped by 1.8 per cent YoY to C$ 73.3 million in the latest quarter, it reported total capital expenditures of C$ 221.2 million in Q3 FY2021, which was a rise of C$ 140 million YoY.
Further, Canadian Tire Corporation also approved a hike of 10.6 per cent in its annual dividend, which went from C$ 4.7 per share to C$ 5.2 apiece.
The retail player is set to dole out a quarterly dividend C$ 1.3 per share on March 1 next year, against an ex-dividend date of January 28, 2022.
Bottom line
Canadian Tire’s President and CEO Greg Hicks has noted in the latest earnings report that the company currently holds robust supply chain capabilities, making it “well-positioned” to enter the fourth quarter.
A company’s financial results and dividend structures play an important role in understanding its overall health and future potential. However, investors should also analyze the fundamentals of a company to evaluate its return capability.
