In nation furious at Trump, Canadian Tire CEO says patriotism drove sales

Article content

Big-box retailer Canadian Tire Corp. said retail sales jumped 6.4% at its main banner in the second quarter, with more shoppers going to its stores as part of a “Buy Canada” wave.

Some Canadian consumers have been boycotting or reducing their business with U.S. companies as part of a backlash to President Donald Trump’s trade war. Canadian-owned retail outlets have used advertising and signs to wrap themselves in the maple leaf or make it easier for customers to find Canadian products on store shelves.

“We have no doubt that patriotic purchasing is real and working in our favor,” Chief Executive Officer Greg Hicks told analysts Thursday.

The Toronto-based company’s largest business is just over 500 Canadian Tire stores, which sell auto parts, tools, gardening equipment and other hard goods. It also owns the SportChek and Mark’s banners, which sell sporting goods and clothing, along with a chain of gas stations and a financial division.

Overall revenue was up 5.2% to C$4.2 billion ($3.1 billion), beating the C$4.1 billion average estimate by analysts in a Bloomberg survey. But adjusted earnings of C$3.57 per share fell short of the estimated C$3.93.

The shares were down more than 6% as of 10:19 a.m. in Toronto to C$173.35.

Executives said they believe consumer spending is holding up well in Canada, and they’re monitoring patterns in stores in southern Ontario, a manufacturing region that has been hit harder by the tariff battle with the U.S.

Canada is one of the only countries to retaliate against Trump’s tariffs with its own counter-tariffs, which have been applied to tools, sports equipment and other products that are important lines for Canadian Tire.

In February, shortly after Trump signed his first executive orders on tariffs, Hicks said the retailer has alternative suppliers for all products that originate from the U.S., and at least a quarter could be sourced within Canada. The company would have to look overseas, however, for certain auto parts.

Retail gross margin, excluding petroleum, declined by 0.9 percentage points to 34.8%, partly because of inventory the company bought in the first quarter when the Canadian dollar was weak.

In March, the company said it would spend C$2 billion over four years on a restructuring plan to accelerate retail growth, expand its loyalty program and cut operating costs. It eliminated some corporate positions from its workforce in July, CTV News reported, citing a statement from the company.

“We expect our restructuring and reductions to be largely complete in the third quarter, creating teams that are faster and better equipped,” Hicks said Thursday.

— With assistance from Laura Dhillon Kane.