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Canadian Tire Reports Loss in Q3

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Canadian Tire, a leading retail company, reported a loss of 27.8 million Canadian dollars ($20.2 million) in the third quarter. This was attributed to a charge related to the acquisition of its financial service arm stake. In contrast, the company had reported a profit of C$225 million in the same quarter last year.

The loss was primarily due to a change in fair value charge of C$328 million resulting from the acquisition of Bank of Nova Scotia’s 20% stake in Canadian Tire Financial Services in late October. The company’s normalized earnings were C$2.96 per share, falling short of analysts’ expectations of C$3.29 per share.

Despite the loss, Canadian Tire saw a slight increase in revenue, which rose to C$4.25 billion from C$4.23 billion. This exceeded analyst expectations of a decline to C$4.18 billion. However, the company noted that consumer demand has been softening, leading to a 1.6% decrease in consolidated comparable sales.

In October, Canadian Tire regained full ownership of its financial-services arm by acquiring the stake from a Canadian bank for C$895 million. This move is expected to provide the company with greater flexibility in delivering value to its 11 million active loyalty members, including 2.3 million credit-card holders.

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