- Canadian Tire (TSX:CTC) will retain full ownership of Canadian Tire Financial Services after assessing strategic alternatives
- The decision supports scaling the Triangle Rewards loyalty program and enhancing its retail ecosystem
- The financial services division has grown to manage $7.3 billion in receivables and generates $385 million in annual pre-tax income
Canadian Tire (TSX:CTC) will retain 100-per-cent ownership of Canadian Tire Financial Services (CTFS) following an assessment of strategic alternatives. The decision aligns with the company’s broader strategy to enhance the Triangle Rewards loyalty program and strengthen its retail ecosystem.
The review process, which engaged multiple potential partners, reaffirmed that Canadian Tire is best positioned to maximize CTFS’s value. CTFS contributes significantly to Canadian Tire’s retail operations by managing credit card operations for over 2.3 million Triangle cardholders, representing some of the company’s most loyal customers.
“Having reviewed the alternatives, we are confident this is the optimal path for shareholder value creation,” Greg Hicks, president and chief executive officer of Canadian Tire, said in a statement. “Retaining CTFS cements our flexibility to scale Triangle Rewards and pursue strategic partnerships with leading Canadian brands.”
Triangle Rewards is central to Canadian Tire’s retail strategy, engaging more than 11 million members with personalized offers and Canadian Tire Money (eCTM) incentives. Through CTFS, the program has distributed 75 per cent of all eCTM, demonstrating its critical role in driving customer loyalty and spending.
CTFS has seen robust growth with credit card receivables increasing 65 per cent over the past decade to $7.3 billion. Ranked as Canada’s seventh-largest credit card issuer, CTFS generated $385 million in pre-tax income in 2023, underscoring its financial importance.
The company also highlighted plans to reduce debt related to its 2023 repurchase of CTFS shares. Proceeds from the recent sale of a Brampton industrial property, combined with improved cash flow, will help achieve this goal.
As Canadian Tire looks to the future, the integration of CTFS with its retail operations and the expansion of Triangle Rewards partnerships are expected to drive sustained growth, solidifying its position in Canada’s retail and financial services markets.
About Canadian Tire
Canadian Tire, founded in 1922, is a leading Canadian retail and financial services company. Its diverse portfolio includes retail banners such as Canadian Tire, Mark’s, SportChek and Pro Hockey Life, offering products across the automotive, home, sports and lifestyle categories. The company also operates Party City, PartSource, Gas+ and the technical outdoor brand Helly Hansen. With close to 1,700 retail and gasoline outlets, Canadian Tire supports its operations through its financial services division, which manages the Triangle Rewards loyalty program and credit card services.
Canadian Tire stock (TSX:CTC) last traded for C$222.75 per share. The stock has given back 12.66 per cent year-over-year but has gained 14.68 per cent since 2019.
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(Top photo of a Canadian Tire storefront: Canadian Tire)
