Hamilton 304 Main Street East | 88.55m | 25s | CT REIT | Arcadis

Chris R. said:
What evidence do you have that their urban stores aren't doing well? Their net income is up and their stock value is doing well enough.

Has there been reports of urban store closures or issues?
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Canadian Tire is not doing particularly well. Their Q2 reporting did have an increase in net income, but that was on the back of some cost reductions. Year-over-year revenue (which matters the most and is the cleanest measure of ongoing/future success) has been hurting for some time. The stock price is at the same level as it was six years ago.

They might not be in a rush to put in a new store, but they are probably not in any rush to close the existing one either. I doubt that shovels in the ground are happening anytime soon.
 
BCTed said:
Canadian Tire is not doing particularly well. Their Q2 reporting did have an increase in net income, but that was on the back of some cost reductions. Year-over-year revenue (which matters the most and is the cleanest measure of ongoing/future success) has been hurting for some time. The stock price is at the same level as it was six years ago.

They might not be in a rush to put in a new store, but they are probably not in any rush to close the existing one either. I doubt that shovels in the ground are happening anytime soon.
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I mean, in the world of ever increasing profits, that may not look so good, but overall, earning a profit and tightening costs seems like it's doing decent. I think it's an unhealthy corporate market to expect 10% increase in returns every year. It's unsustainable and leads to the eventual collapse of businesses. A steady flow of revenue, fluctuating year to year perhaps, while finding smart places to reduce overhead is smart business in my mind. Moving some stores to residential construction with stores at the base makes a ton more sense.

This development will have nearly 350 units without parking which means almost 500-550 people without direct access to a car. That's built-in customers and if they're rentals it's income for years to come. Not to mention a capital asset that can be borrowed against or sold if money is needed for future expansions or changes that would be off the table without that type of asset.

Diversifying is one of the big reasons I think CT is here to stay. It pays a 4.5% dividend, which I think could likely be lowered to invest further into the business, which would allow growth, but honestly I don't think CT is that interested in large-scale growth but rather with staying the course and perhaps making small purchases of smaller companies. Their REIT is also doing quite well and has pretty nice dividends.

Honestly I've been watching the CT REIT and been debating jumping ship from my current investments in REIT and focusing more on CT.
 
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Anecdotally I think CT's pricing model of "overpriced unless on sale, then 70% off for an actually reasonable price" hurts them with modern demographics. Everyone I know over the age of 50 loves CT but everyone I know younger doesn't share the same affinity, largely because they don't care for the "value hunt" as much. I know I would rather go to Home Depot and pay a more constant, fair price, even if CT can offer better pricing on sales.
 
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