Canadian Tire Corporation Provides Business Update Related To COVID-19
TORONTO, April 2, 2020 /CNW/ - As the COVID-19 pandemic evolves, Canadian Tire Corporation (TSX:CTC, TSX:CTC.a) (CTC) continues to meet the heightened needs of Canadians and communities across the nation.
As 'Canada's Store', Canadian Tire Retail stores remain open, where permitted, to provide the essential products Canadians need during the current COVID-19 crisis. The safety of our customers and employees is our top priority and we have introduced several measures to reduce the spread of the virus in our stores. Stores have reduced their hours and are continuing to take precautions with enhanced cleaning protocols. To enforce physical distancing, we have installed plexiglass and floor decals and are working to limit the number of customers allowed in-store at any given time.
We continue to experience significant increases in Canadian Tire's eCommerce business across many categories. Last week, with the introduction of Curbside Pick Up, customers were offered another way to same-day shop while maintaining their physical distance. Demand for the new service has been strong during the first week of operation.
We previously announced that our Mark's/L'Équipeur, SportChek, Party City, Pro Hockey Life, National Sports, and PartSource stores have been temporarily closed to the public. While they will remain closed until further notice, we are continuing to see significant eCommerce demand, particularly at SportChek and Mark's as Canadians purchase health and fitness products and healthcare and industrial apparel. We are fully committed to helping our employees during this difficult time through financial support for our frontline teams, including a special support payment for our corporate store, distribution and call centre employees.
Canadian Tire is also taking aggressive action to preserve its cash position and financial flexibility, including:
• Implementing a plan to reduce operating costs at our head office and corporate stores, and to reduce working capital across the enterprise
• Deferring some of our 2020 planned capital expenditures, in all categories of projects
• Pausing the repurchase of shares
• Leveraging our well-established and solid relationships with Canadian banks and our high standing in capital markets to secure additional sources of liquidity should they be required. This is in addition to the existing funding channels available to CTC and its related entities, which are:
- $1.975B committed bank lines for general corporate purposes at CTC
- $2B Note Purchase Facility, and $250M revolver at Canadian Tire Bank
- $300M committed bank lines at CT REIT
- 350M Norwegian Krone ("NOK") secured revolving committed credit facility for Helly Hansen
"We have long-established ourselves as a resilient organization and we are well-positioned to manage through these unprecedented times. Our multi-category assortment, healthy balance sheet, Triangle Rewards program, credit card value proposition, access to multiple sources of liquidity for all our businesses, and ultimately, the essential role we play in communities across Canada, will serve us well as the country emerges from this current crisis," said Greg Hicks, President and CEO, Canadian Tire Corporation.
Certain statements made in this press release may constitute forward-looking information under applicable securities laws, including statements concerning store operations and closures, our measures to reduce the spread of the virus, the effect of the pandemic on the demand for products and consumer purchasing behaviours, financial support for employees, the planned reduction of operating costs and working capital requirements, deferring capital expenditures, pausing the repurchase of shares, access to existing funding channels and securing additional sources of liquidity. Although CTC believes that the forward-looking information in this press release is based on information, assumptions and beliefs which are current, reasonable and complete, this information is necessarily subject to a number of factors, risks and uncertainties that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking information.
Risks and uncertainties related to the effects of COVID-19 include the length and severity of the pandemic and its effects on consumer demand and purchasing behaviours, supply chains, our ability to operate stores, and credit and capital markets, including access to capital. For more information on other risks, uncertainties and assumptions that could cause CTC's actual results to differ from current expectations, refer to section 2.8 (Risk Factors) of our Annual Information Form for fiscal 2019 and to section 10 (Key Risks and Risk Management) and all subsections thereunder of our Management's Discussion and Analysis for the year ended December 28, 2019, as well as CTC's other public filings, available at www.sedar.com and at www.corp.canadiantire.ca.
CTC does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, except as is required by applicable securities laws.
About Canadian Tire Corporation
Canadian Tire Corporation, Limited, (TSX: CTC.A) (TSX: CTC) or "CTC", is a family of businesses that includes a Retail segment, a Financial Services division and CT REIT. Our retail business is led by Canadian Tire, which was founded in 1922 and provides Canadians with products for life in Canada across its Living, Playing, Fixing, Automotive and Seasonal & Gardening divisions. PartSource and Gas+ are key parts of the Canadian Tire network. The Retail segment also includes Mark's, a leading source for casual and industrial wear; Pro Hockey Life, a hockey specialty store catering to elite players; SportChek, Hockey Experts, Sports Experts, National Sports, Intersport and Atmosphere, which offer the best active wear brands; and Party City Canada, a leading, one-stop shopping destination for party supplies and seasonal celebrations. The more than 1,740 retail and gasoline outlets are supported and strengthened by CTC's Financial Services division and the tens of thousands of people employed across Canada and around the world by CTC and its local dealers, franchisees and petroleum retailers. In addition, CTC owns and operates Helly Hansen, a leading global brand in sportswear and workwear based in Oslo, Norway. For more information, visit Corp.CanadianTire.ca.
SOURCE Canadian Tire Corporation, Limited
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