One analyst says that as Canadian Tire faces volatility, he sees longer-term growth for the business following fourth-quarter earnings marked by declines in profit and revenue. 

David Aime, an equity analyst at Cardinal Capital Management, which owns shares in Canadian Tire, said in an interview with BNN Bloomberg Thursday that the retailers' earnings “came in weaker than expected” during the fourth quarter.  

“We still really like the company, we like to add to it on weakness,” he said.

Aime added that the Toronto-based retailer has made “great strides as an operator” during the past 10 years.

“We think that long term, this company is going to do well. It's a retailer, so there are ups and downs. There are fixed costs in the business. So when sales fall you get that hit on earnings,” he said.  

“But if you just look at the long-term dividend growth track record of Canadian Tire, it really shows that this company has done a great job.” 

Canadian Tire reported $172.5 million in profit attributable to shareholders, around a 68-per-cent decline from $531.9 million a year earlier. Revenue came in at $4.44 billion, down from $5.34 billion the previous year. 

Normalized diluted earnings per share came in at $3.38 from $9.34 a year earlier. 

Aime added that the firm faced challenges across all three of its banners, including SportChek, Mark's and Canadian Tire.  

“When you're a company that sells snow shovels, snow boots, winter jackets and you don't have any snow and have a mild December, it really impacts sales,” Aime said. 

He also highlighted that macroeconomic challenges impacted the business. 

“All of the cumulative inflation over the last few years is negatively impacting consumer's ability to spend. They're having to make difficult decisions with where they're allocating their wallet.”

Lyle Stein, the president of Forvest Global Wealth Management, said in an interview with BNN Bloomberg on Thursday that lower discretionary spending among Canadians impacted the retailer's earnings. 

“When your discretionary spending falls, you get worried. You don't spend at Canadian Tire,” Stein said adding that the economy is facing weakness relative to the U.S., with a longer-term trend of lower personal income growth. 

With files from The Canadian Press