ORONTO -- Canadian Tire Corp. reported lower second-quarter earnings and a smaller increase in revenue than analysts had been expecting from the company that operates Canadian Tire, Mark's, Sport Chek and other banners.
Analyst Irene Nattel of RBC Dominion Securities attributed some of the weakness to costs associated with the launch of the Triangle Rewards customer loyalty program and poor weather in April, which affected retail sales.
The Toronto-based company had $156 million of net income attributable to shareholders, or $2.38 per share, down from $195.2 million or $2.81 per share a year earlier.
Its adjusted net income was $170.6 million or $2.61 per share, down from $195.2 million or $2.81 per share.
Analysts had estimated $3.04 of adjusted net income and $3.06 of net income, according to Thomson Reuters Eikon.
Revenue was $3.48 billion for the three months ended June 30, up 3.2 per cent from $3.37 billion but below analyst estimates of $3.56 billion.
Canadian Tire chief executive Stephen Wetmore said the quarter got off to a slow start but picked up in May and June.
"While our expectations for growth in the quarter were much higher, it is a testament to the strength of our brands that we grew our retail sales on a year over year basis, despite all of our retail businesses being affected by one of the coldest months of April on record," he said in a statement.
He also said the second quarter included measures to strengthen its retail operations and financial services business, with the launch of Triangle Rewards and associated credit cards.
Wetmore also said closing the previously announced purchase of Helly Hansen, the company's first international brand, was part of its long-term plan for growth.
Canadian Tire shares fell about eight per cent in early trading at $166.25, down $16.15.
On Wednesday, its shares hit a record intraday high before closing at $182.40, giving the company a market value of nearly $11 billion.
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