Canadian Tire Corporation unveils "True North" growth strategy

Investing.com -- Canadian Tire Corporation, Limited, commonly referred to as CTC, has announced a new four-year transformative growth plan, True North. The strategy focuses on data-driven customer relationships, core retail growth, an expanded Triangle Rewards loyalty system, and targeted capital allocation. The aim is to enhance value for customers and generate leading shareholder value above the company’s historic levels.

The True North strategy will be implemented by a restructured senior leadership team. The company will transition from a complex holding company model into a more agile operating company. This new structure aims to increase customer focus, agility and scale.

CTC’s President and CEO, Greg Hicks, stated that the transformation leverages their high customer trust, market-leading data, and the vision to reward and serve Canadians effectively. This transformation is the next strategic horizon for CTC, marking the end of the Better Connected strategy which established a foundation for higher performance.

True North includes numerous strategic initiatives designed to accelerate retail growth and enhance financial performance. This involves investments in omnichannel network expansion and new data analytics to increase market share and expand CTC’s total addressable market.

CTC plans to enhance the Triangle Rewards loyalty system through its privileged first-party data, enabled by technology and AI. The loyalty system will provide more personalized member value, additional brand partners that issue Canadian Tire Money beyond CTC stores, and a new retail-focused bank strategy to attract and engage more Triangle Mastercard (NYSE:MA) holders.

The company will streamline its structure, transitioning from a holding company model of individual businesses focused on products to an operating company universally focused on customers. This new model aggregates CTC’s multiple banners, systems, and data, resulting in a wealth of customer insights and competitive scale that no single banner could achieve alone.

To deliver True North, CTC has restructured its senior leadership team. Susan O’Brien is appointed EVP & Chief Transformation Officer, TJ Flood is appointed EVP & Chief Operating Officer, and the company will soon appoint an EVP & Chief Commercial Officer. Darren Myers, CTC’s new EVP & Chief Financial Officer, will join the team on April 1.

CTC will enhance capital allocation by prioritizing the highest-returning investments and assets. This is evident in the company’s recent portfolio moves such as retaining full ownership of Canadian Tire Financial Services and the February 19, 2025, announcement of the agreement to sell global performance brand Helly Hansen.

CTC also announced that it is optimizing its SportChek portfolio, with new-concept stores and a revised go-to-market strategy for its Atmosphere business. The company will close 17 uncompetitive standalone Atmosphere stores, with 14 sites to be co-located within SportChek stores.

CTC expects to invest more than $2 billion over four years starting in 2025; expense savings begin in 2025 with $100 million run rate expected to start in 2026. The company anticipates increased transformation and advisory costs in relation to its four-year strategy, including operating expenses increasing by $60 million in 2025, primarily for IT investments to enable transformation initiatives. One-time charges of approximately $85 million in transformation and restructuring costs, including severance, as well as closure costs for Atmosphere stores, are expected to deliver annualized operating expense savings of $100 million starting in 2026. The company’s management team plans to provide updates on its True North activities throughout 2025, beginning when it reports its first-quarter results on May 8, 2025.

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