Canadian Tire to lay off 3% of staff as consumer spending cools

Canadian Tire Corp. Ltd. plans to cut about three per cent of its workforce in its fourth quarter as it faces softening consumer demand.

The retailer said Thursday, in addition, the elimination of the majority of current job vacancies will result in a further reduction of three per cent.

Canadian Tire said it expects to take a charge of between $20.0 million and $25.0 million in its fourth quarter in connection with the decision, while annualized run-rate savings are expected to be about $50.0 million.

“In a more challenging economic environment, we are accelerating efficiency initiatives, prioritizing investments within our Better Connected strategy, and actively managing our resource allocation,” Canadian Tire chief executive Greg Hicks said in a statement.

The announcement of the cuts came as Canadian Tire raised its quarterly dividend and reported a loss in its latest quarter, weighed down by a one-time charge related to its deal to buy back the 20 per cent stake in Canadian Tire Financial Services that is owned by Scotiabank.

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The retailer said Thursday it will now pay a quarterly dividend of $1.75 per share, an increase of 2.5 cents per share.

Canadian Tire reported a net loss attributable to shareholders of $66.4 million, or $1.19 per diluted share, for the quarter ended Sept. 30 compared with a profit of $184.9 million, or $3.14 per diluted share a year earlier.

The results included a $328-million charge related to the Scotiabank transaction, offset in part by a $131-million insurance recovery related to a fire at a distribution centre in March.

On a normalized basis, Canadian Tire says it earned $2.96 per diluted share in its latest quarter, compared with $3.34 per diluted share a year earlier.

Revenue was $4.25 billion, up from $4.23 billion in the same quarter last year, while consolidated comparable sales fell 1.6 per cent.