Canadian Tire Corporation, Limited

Canadian Tire reported diluted normalized EPS of $3.94, up 10% year over year. Retail IBT rose 1.2% to $201 million, normalized Retail EBITDA increased 2.2% to $498 million, and Retail ROIC was 11.1%, up 80 basis points. Excluding Petroleum, Retail sales were up 2.5%, Retail revenue was down 1.1%, and comparable sales were up 0.7% overall; SportChek comps rose 8%, Mark's comps rose 4.2%, and CTR comps fell 0.8%. Excluding Petroleum, gross margin was 35.1%, up 33 basis points, and Retail SG&A was $10 million lower year over year, with SG&A at 23.3% of revenue. Looking ahead, management said it feels good about its full-year gross margin target of 35% plus, expects some Q3 headwinds from higher transportation fuel surcharges and targeted investments, expects Q3 SG&A dollars to grow, and now sees 2026 CapEx in the range of $450 million to $500 million. It also said 30 store refresh projects were completed in the first half and that the buyback program continued with an additional $85 million of shares repurchased in Q2.

Greg Hicks framed the quarter as one where the team kept delivering despite a tough consumer backdrop, weak sentiment, and unusually bad weather. He emphasized that the company is ‘performing while transforming,’ pointing to True North initiatives in AI pricing, loyalty, digital harmonization, and new customer-occasion playbooks. His tone was upbeat and confident, especially around long-term omnichannel growth, Triangle partnerships, and using MOSaiC/AI to find share in new and existing occasions like back-to-school and holiday.

Darren Myers focused on the financial discipline behind the quarter: diluted normalized EPS of $3.94 was up 10%, gross margin excluding Petroleum was 35.1% and up 33 bps, Retail SG&A fell $10 million, and SG&A as a percentage of revenue stayed at 23.3%. He highlighted stable Financial Services risk metrics, including aging at 3.3%, net write-offs around 7.2%, allowance at $935 million, and an 11.8% allowance rate. On capital allocation, he noted 30 refresh projects completed in the first half, 2026 CapEx now expected at $450 million to $500 million, and an additional $85 million of share repurchases in Q2.

Analysts focused on three main areas: the new customer-occasion strategy, the 14% eCommerce growth at CTR, and the pace of expense and credit risk trends. Management said the lighthouse strategy is a more modernized category-management approach using customer data to identify assortment gaps and pricing/marketing changes, and that eCommerce growth is being driven by free shipping, buy-online-pick-up-in-store, extended online-only assortments, and better digital integration across banners. On the bank, management said insolvencies have risen but payment behavior remains stable, the reserve is adequate, and profitability is at an inflection point even as SG&A stays elevated around 28% because of growth and investment.