(Reuters) - Canadian Tire Corp Ltd CTCa.TO unveiled a plan to save at least C$200 million ($151.8 million) annually by 2022 after missing third-quarter revenue and profit estimates as the retailer faced intense competition from Walmart and Amazon.com.
The savings plan and an increased quarterly dividend overshadowed the downbeat quarterly results and pushed shares up as much as 4% on Thursday.
Canadian Tire said it is looking to cut costs by centralizing operations such as marketing and sourcing for its multiple banners including Mark’s and SportChek.
“It allows us to be more focused and effective by ‘doing things once’, and to eliminate redundant costs,” Chief Executive Stephen Wetmore said on a post-earnings call.
Canadian Tire's brick-and-mortar sales have been pressured by the online-focus of Walmart WMT.N and Amazon.com AMZN.O and the 97-year-old company has been investing heavily in its ecommerce business and speed up delivery.
The efforts, however, fell short of market expectations in the third quarter.
Total revenue rose marginally to C$3.64 billion, but missed the average analyst estimate of C$3.73 billion.
Same-store sales at its retail segment rose 2.7%.
Net income fell 1.6% to C$227.7 million, or C$3.20 per share in the quarter ended Sept. 28, hurt by higher freight costs and a strong dollar.
Excluding items, Canadian Tire earned C$3.46 per share.
Analysts on average had expected the company to earn C$3.47 per share, according to IBES data from Refinitiv.
The company raised its quarterly dividend by 10 Canadian cents to C$1.14 per share.
Reporting by Praveen Paramasivam in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila
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