Canadian Tire to Cut Around 3% of Workforce as Consumers Spending Decreases

Canadian Tire Corp. Ltd. is set to cut approximately 3% of its workforce in the fourth quarter due to softening consumer demand. 

The decision also involves eliminating the majority of current job vacancies, resulting in an additional 3% reduction. 

The company anticipates incurring a charge between $20 million and $25 million in the fourth quarter, with expected annualized run-rate savings of about $50 million. 

CEO Greg Hicks stated that, in a challenging economic environment, the company is accelerating efficiency initiatives, prioritizing investments within its Better Connected strategy, and actively managing resource allocation. 

Alongside the job cuts, Canadian Tire increased its quarterly dividend and reported a loss in the latest quarter, influenced by a one-time charge related to repurchasing the 20 percent stake in Canadian Tire Financial Services from Scotiabank. 

The net loss attributable to shareholders was $66.4 million for the quarter ended Sept. 30, compared to a profit of $184.9 million a year earlier. The results included a $328 million charge related to the Scotiabank transaction, partially offset by a $131 million insurance recovery for a fire at a distribution center in March. 

On a normalized basis, Canadian Tire reported earnings of $2.96 per diluted share in the latest quarter, down from $3.34 per diluted share a year earlier, with revenue at $4.25 billion and consolidated comparable sales declining by 1.6 percent.

Source: The Canadian Press 

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