Canadian client nonetheless spending — Canadian Tire This fall confirms resilience

Canadian Tire reported Q4 numbers today and the read-through on the Canadian consumer is clear: they’re still spending and there are no indications of weakness.

Comp sales came in at +4.2% across all banners, with SportChek ripping at +9.5% and Mark’s up 7.2%. Normalized EPS jumped 38% to $4.47.

What’s interesting from the call this morning is what CEO Greg Hicks said about spending patterns across income cohorts. The company’s internal data shows spend increases across all income levels and debt burdens. The biggest increase in Q4 actually came from the most debt-burdened households — which is either a sign of confidence or a sign they’ve stopped caring. Either way, wallets are open for now.

That said, there’s nuance here. The gap between essential and discretionary spending at Canadian Tire’s flagship stores is still wide — essentials up roughly 4.7% vs. discretionary at 1.6%. You would like to see that reverse. CFO Darren Myers called them “resilient but discerning,” which is corporate-speak for “they’ll buy snow tires but they’re thinking twice about a hockey stick.”

On the macro side, management acknowledged the headwinds everyone already knows about: mortgage renewals, geopolitical noise, inflation. But they’re buying inventory for growth in 2026 and flagged that Q1 is off to a solid start with winter weather driving sales into February.

The one caveat for the bulls: winter weather was a meaningful tailwind in Q4, and the company benefited from an extra retail week worth ~$287 million in sales and ~$40 million in pre-tax income. Strip that out and the underlying growth is still healthy, just not quite as eye-popping.

If you’re looking for signs of a Canadian consumer rollover, it’s tough to find. Notably though, the shares initially opened strongly to the upside but have now reversed and are up just 0.3%.

Some are pointing to this:

CEO Greg Hicks touted a “conviction that the business should, over the long term, deliver annual retail sales growth of 3% to 5%”. But CFO Darren Myers immediately had to throw cold water on that for the upcoming year, explicitly warning analysts: “I think it’s clear to everyone that when Greg said the 3% to 5%, it was not a guide for this year”.

I also noted that the company was highlighting tough H2 comps on weather and patriotic spending around Liberation Day.

The loonie is flat today but tomorrow we get the December retail sales report (with Jan advanced numbers). December is expected to show a 0.5%, m/m decline and -0.3% ex autos. The latest spending tracker from RBC was soft with the bank highlighting weather effects.