News Briefs


Canadian Tire Corp. Ltd. reports second quarter profit fell from a year ago

London, Ontario, Canada - August 30, 2020: A Canadian Tire Gas station in London, Ontario. Canadian Tire Corporation Limited is a Canadian retail company.

Canadian Tire Corp. Ltd. reported lower second-quarter profit compared to a year ago.

The retailer reported its net income attributable to shareholders totalled $145.2 million or $2.43 per diluted share for the quarter, down from $223.6 million or $3.64 per diluted share a year earlier.

Canadian Tire says retail sales rose 9.9% and comparable sales, excluding petroleum, gained 5.0%. Retail sales at its SportChek banner grew 0.6% as comparable sales gained 4.1%, and retail sales at its Mark's banner rose 21.1%t as comparable sales rose 20.9%.

On a normalized basis, Canadian Tire says it earned $3.11 per diluted share, down from a normalized profit of $3.72 per diluted share a year earlier.

The company says while the performance of the retail segment of the business remains significantly above pre-pandemic levels on a normalized basis, higher expenses including foreign exchange resulted in earnings coming in lower in the second quarter compared to the prior year.

Canadian Tire also says its financial services revenue grew 15.0%, driven by growth in receivables and growth in credit card sales, due to increased customer activity and new account acquisitions.

-The Canadian Press


Metro faces ongoing worker shortage, higher overtime pay to keep grocery stores open

Metro Ontario inc. office in Etobicoke, Toronto, Canada. Metro Inc. is a Canadian food retailer operating in the provinces of Quebec and Ontario.

Workers at Metro Inc. are putting in overtime to keep stores open as the company grapples with an ongoing labour crunch, the Montreal-based grocery and drugstore retailer said Wednesday.

"There's a lot of open positions out there and there's not enough workers to fill them,'' Metro president and CEO Eric La Fleche said during a call to discuss the company's third-quarter results.

Canada's labour market remains exceptionally tight, with more than one million job vacancies across the country amid historic low unemployment rates, according to Statistics Canada.

"Labour shortages are causing pressures ... because that increases overtime to supply our stores,'' La Fleche said. "We have higher overtime percentages than we're used to.''

He added that Metro currently has "more open positions'' than usual but declined to provide an exact number of vacancies across the company's warehouses and stores, which include conventional supermarkets like Metro and Metro Plus, discount grocery chains Super C in Quebec and Food Basics in Ontario as well as drugstores Jean Coutu and Brunet.

La Fleche's comments came as the retailer reported a third-quarter profit of $275 million, up from $252.4 million a year earlier, as sales gained 2.5%.

The profit amounted to $1.14 per diluted share for the period ended July 2, up from $1.03 cents per diluted share a year earlier.

Sales totalled $5.87 billion, up from $5.72 billion, as food same-store sales gained 1.1% and pharmacy same-store sales rose 7.2%.

On an adjusted basis, Metro said it earned $1.18 cents per diluted share for the quarter, up from $1.06 per diluted share a year earlier.

The grocer warned that ongoing inflationary pressures and labour shortages could begin to weigh on margins.

"If this high inflationary, high price environment continues it will continue to put pressure on margin,'' Metro chief financial officer Francois Thibault said.

For now, strong margins in the company's pharmacy division made up for a decline in food gross margin, he said.

"We had very strong front-store sales in our pharmacy business at Jean Coutu and Brunet in the quarter,'' La Fleche said. "Over-the-counter cough and cold products are flying.''

Canada's jobless rate stayed at 4.9% in July, the lowest since comparable record-keeping began in 1976, Statistics Canada reported last Friday in its latest labour force survey.

Meanwhile, inflation continued to shape consumer habits during the company's third quarter.

Shoppers increasingly opted for discount grocery stores, switched to cheaper house brands and sought out cheaper protein choices.

"We saw the shift from conventional to discount (stores) accelerate when compared to the previous quarter,'' La Fleche said.

"We also saw a shift to private labels (and) trading down on proteins ... there's a shift for sure to value.''

The price of food purchased at stores increased 9.4% in June, Statistics Canada said last month.

Metro also said it expects same-store food sales to grow at a higher rate than in recent quarters and for growth in prescriptions on the pharmacy side of the business to moderate.

-The Canadian Press


Saputo reports net earnings of $139 million

Close up of Saputo sign at their headquarters in Montreal, QC, Canada. Saputo is a Canadian dairy company.

MONTREAL - Dairy giant Saputo Inc. says it had net earnings of $139 million for the quarter ended June 30, up from $53 million for the same quarter last year.

Chief executive Lino Saputo says the company has navigated inflationary pressures by raising prices, booting productivity and undertaking cost containment initiatives.

Saputo says in a statement that the company could see improved margins as input costs stabilize and efficiencies and ``price realization'' continue.

Revenue for the company's first quarter of fiscal 2023 amounted to $4.3 billion, up from $3.5 billion in the same quarter last year.

Adjusted net income came in at $161 million, or 39 cents per share, up from $122 million, or 30 cents per share.

The company says it expects continued inflation pressures ahead on both product inputs and on logistic costs but that it will minimize the effects by raising prices as necessary.

-The Canadian Press


Maple Leaf stock drops on disappointing results as economic challenges weigh

The red maple leaf logo on signs at Canadian food and meat products manufacturer Maple Leaf Canada head office building in Mississauga, Canada

MISSISSAUGA, Ont. - Maple Leaf Foods Inc. saw its share price drop as much as 18% on the Toronto Stock Exchange after it said challenges in labour markets, supply chains and inflation pushed it to a net loss for the second quarter.

The company said it had a net loss of $54.6 million, or 44 cents per share for the quarter ending June 30, compared with earnings of $8.8 million or seven cents per share for the same quarter last year.

Analysts had been expecting earnings of 12 cents a share, according to financial data firm Refinitiv.

The company says the margin of its meat protein group fell short of guidance because of the wider economic challenges, while it took a $18.6 million restructuring charge on its plant protein group as it looks to "rightsize'' the business.

Total company sales were up 3.1% to $1.2 billion, while sales in the plant protein group were down 15.2% to $40.8 million.

Maple Leaf's shares closed down $4.63, or 17.2%, to $22.33 on the Toronto Stock Exchange after trading as low as $22.02 earlier in the day.

-The Canadian Press


Tim Hortons sales above pre pandemic levels as parent company reports sales grew 14%

Interior shot of a Tim Hortons

TORONTO- The CEO of Tim Hortons' parent company says the quick service chain generated sales in its latest quarter above pre-pandemic levels for the first time since the onset of COVID-19, but the business is still being affected by a slower return to offices in regions like Toronto.

"More offices reopened in the second quarter and people are coming back to hybrid capacity, but downtown Toronto is just getting back to work,'' said Restaurant Brands International CEO Jose Cil, on a Thursday call with analysts.

"They're still down high teens in terms of performance from a sales standpoint for some of the restaurants, so mobility in the downtown corridor is still a work in progress.''

Cil's remarks come as restaurant operators and other hospitality businesses are plotting a rebound from the pandemic, which forced many to close their doors, pare back their store counts and face lower sales.

Quick service restaurants, including RBI's Burger King, Popeyes Louisiana Kitchen and Firehouse Subs, were particularly affected because many people were no longer commuting to workplaces and thus, stopped making coffee runs on their way to the office or on breaks.

But in recent months, companies have demanded their staff head back to workplaces and consumers are falling into old habits like buying lunch or coffee meetings.

They're being met with a slew of new products RBI has released at Tim Hortons like a second collaboration with Justin Bieber that took the form of a French vanilla cold brew called Biebs Brew.

Other new additions include cilantro lime and habanero chicken wraps and loaded bowls, which Cil said drove improvements in performance measures linked to younger customers and have re-engaged others that tend to frequent the business' chains for breakfast and snacks only.

As a result, RBI has seen sales grow 14% in the second quarter, although they were down compared to the same time in 2021.

The company, which keeps its books in U.S. dollars, says global system-wide sales were up nearly US$1 billion year-over-year to over US$10 billion, with digital sales growing by double-digits over the same period.

Topping these results could prove tough for RBI, if a rumoured recession materializes.

Cil has yet to see the near 40-year high inflation level impact consumer habits, but said the company is ready to face economic pressures.

"We recognize the uncertain and, at times, difficult environment that we're facing as a result of ongoing commodity and wage inflation, rising interest rates and broader macro uncertainties impacting our industry and many others,'' said Cil.

"While many of these pressures are out of our control, we've been focused on working closely with our franchisees to take thoughtful action to alleviate those within our and our franchisees' control.''

Those actions include providing franchisees with staffing and retention best practices, simplifying back-of-house processes and making training resources easy to follow.

As RBI undertook these efforts, its net income attributable to common shareholders totalled US$236 million or 76 cents per diluted share for the quarter ended June 30, down from US$259 million or 84 cents per diluted share a year earlier.

Revenue for the quarter totalled US$1.64 billion, up from US$1.44 billion in the same period last year.

On an adjusted basis, RBI said it earned 82 cents per diluted share in its latest quarter, up from an adjusted profit of 77 cents per diluted share a year earlier.

-The Canadian Press


Tim Hortons offers coffee and doughnut as proposed settlement in class action lawsuit


Tim Hortons has reached a proposed settlement in multiple class action lawsuits alleging the restaurant's mobile app violated customer privacy, which would see the restaurant offer a free coffee and doughnut to affected users.

The settlement, negotiated with the legal teams involved in the lawsuits, still requires court approval.

The coffee and doughnut chain would also permanently delete any geolocation information it may have collected between April 1, 2019 and Sept. 30, 2020, and direct third-party service providers to do the same.

"We think that it's a favourable settlement because it offers compensation that has a real value,'' said Joey Zukran, a lawyer with the Montreal-based law firm LPC Avocat Inc., which filed the class action in Quebec.

"Privacy cases across Canada are never guaranteed a win,'' he said. "Here we have some form of guarantee, some form of recovery ... as opposed to uncertainty that could last.''

It's unclear how many customers used the app during the 18-month period ending Sept. 30, 2020, and would be eligible to receive a free hot beverage and baked good.

Restaurant Brands International Inc., the parent company of Tim Hortons, said in an investor presentation in May that it had four million active users during the three months ended March 31, 2022.

"I think people who receive this will think it's paltry, but class action settlements are often paltry for the end consumer,'' said David Fraser, a privacy lawyer with McInnes Cooper in Halifax.

While the individual compensation may not seem like much, he said given the number of people potentially involved "it may be reasonable in aggregate.''

Still, others may feel it's not high enough to "act as a disincentive to further mischief,'' Fraser said.

"Any time you settle, there's going to be a compromise,'' he said, adding that the case "reflects how weird privacy harms are.''

"If you used that app and Tim Hortons collected your location information without your adequate, informed consent but nothing has happened with that information, you actually haven't suffered what would be considered a tangible harm,'' Fraser said.

"You're trying to compensate for the feeling of ickiness, the creepiness somebody might feel knowing that their information was collected without their knowledge or consent.''

The proposed settlement comes after an investigation by federal and provincial privacy watchdogs found the mobile ordering app violated the law by collecting vast amounts of location information from customers.

In a report released last month, privacy commissioners said people who downloaded the Tim Hortons app had their movements tracked and recorded every few minutes - even when the app was not open on their phones.

The investigation was launched after National Post reporter James McLeod obtained data showing the app on his phone had tracked his location more than 2,700 times in less than five months.

In a statement, Tim Hortons said it's pleased to have reached a proposed settlement in the four class action lawsuits filed in Quebec, British Columbia and Ontario.

"All parties agree this is a fair settlement and we look forward to the Superior Court of Quebec's decision on the proposal,'' the company said in a statement.

"We are confident that pending the Quebec court's approval of the settlement, the courts in British Columbia and Ontario will recognize the settlement.''

The company said the allegations raised in the class actions were not proven in court and the settlement is not an admission of any wrongdoing.

Tim Hortons said it would be emailing customers Friday to inform them of the proposed settlement.

Tim Hortons said the retail value of a free hot beverage is $6.19 while the value of a baked good is $2.39, plus taxes, according to court documents.

Customers would be provided with a credit for the items with a coupon or through the Tim Hortons app, documents said.

Details on the distribution of the free hot beverage and baked good would be provided if the court approves the settlement, Tim Hortons said.

A hearing has been scheduled in a Quebec court on Sept. 6 to consider the proposed settlement.

-The Canadian Press