Months after Steve Eisman’s bearish call on Canadian Tire Corp., the retailer is facing another short call.

This time it’s from Spruce Point Capital Management LLC, a New York-based investment firm that sees as much as a 50 per cent downside for the retailer’s shares.

“Canadian Tire is exhibiting classic signs of strain,” Ben Axler, founder and chief investment officer of Spruce Point Capital, told BNN Bloomberg’s Greg Bonnell in a Friday interview.

“As a brick-and-mortar retailer poorly-positioned in an e-commerce and mobile world, we think Canadian Tire just doesn’t stack up well.”

Axler, who has made short calls on other companies such as Maxar Technologies Inc., added he doesn’t see Canadian Tire as price competitive and that it’s lagging in its social media and marketing presence. Other negatives for the company include not offering free shipping and having many of its stores located close to key competitors like Walmart Inc. or Home Depot Inc., he said.

Canadian Tire refuted Axler's claims in a statement released Thursday night.

"We do not agree with the conclusions in this report, as it contains numerous inaccuracies, which we believe are solely intended to benefit its author," the company said. 

"It would be extremely unfortunate if investors took action based on the report."

While Axler acknowledged all retailers are facing similar challenges, Axler said Canadian Tire, in particular, is slower to adapt to a changing landscape than its peers.

“We just think they’re late to the game here,” he said.

In a recent interview with BNN Bloomberg, Canadian Tire’s Chief Financial Officer Dean McCann said he welcomes the criticism, arguing the company is well-positioned to take on any challenges and that its large bricks-and-mortar presence gives it a strong advantage.

In its latest quarter, the company announced it plans to cut more than $200 million in annual costs by 2022. It reported $3.64 billion in revenue, up modestly from $3.63 billion it made in the previous year. It also boosted its quarterly dividend by 10 cents to $1.1375 per share.

Axler, who said he wasn’t able to confirm the size of his short position, said he also sees an issue with Canadian Tire’s balance sheet.

“The leverage has been rising,” he said. “We think the company has been misdirecting capital towards share repurchase and increasing dividends.”

“This is not a time when shareholders should be rewarded. In fact, we think we should they should deal with its ballooning debt load and prioritize repayment.”

Spruce Point Capital isn’t the first investor to short the Toronto-based retailer. In August, famed short-seller Steve Eisman disclosed his position in an interview with BNN Bloomberg, arguing the company’s credit card business makes it susceptible to the same pressures faced by the Canadian banks.