On February 13, Canadian Tire CEO Greg Hicks addressed preparations to navigate potential tariff impacts amid escalating trade tensions between Canada and the United States. The retailer is evaluating its product portfolio and U.S. suppliers to explore options that counter increased cost pressures from tariffs to maintain business sustainability and customer satisfaction.
President Donald Trump temporarily halted threats of imposing high tariffs on Mexico and Canada, reaching agreements related to border security and law enforcement with the neighboring nations. Nevertheless, both Canada and Mexico have vowed to impose retaliatory tariffs on American goods if Trump proceeds with the proposed 25% tariffs on Mexican and majority of Canadian imports.
According to Hicks, Canadian Tire directly sources 15% of its products from the U.S., with residual effects expected from tariffs imposed on goods from both China and Mexico. Following lower-than-expected fourth-quarter revenue and profits, the company's Toronto-listed shares declined by 5%, influenced by subdued consumer spending in non-essential categories.
In the latest quarter, the company saw a 1.5% revenue increase to C$4.51 billion ($3.17 billion), missing the projected C$4.59 billion estimation. The adjusted profit per share stood at C$4.07, falling short of the anticipated C$4.27 figure.
Hicks observed a rise in consumer confidence in Canada post interest rate cuts during an earnings call but acknowledged that any gains in confidence had probably been offset due to tariff concerns.