Canadian Tire Corporation, Limited

Thank you for standing by. My name is Daniel and I will be your conference operator today. Welcome to the Canadian Tire Corporation earnings call. All lines have been placed on mute to prevent any background noise. Following today's presentation, there will be a question and answer period. If you would like to ask a question during that time, please press star then 11 on your telephone keypad. To withdraw your question, please press star then 11 again. Now I will pass along to Karen Keyes, Head of Investor Relations for Canadian Tire Corporation. Karen?

Thank you, Daniel. Good morning, everyone. Welcome to Canadian Tire Corporation's fourth quarter and 2023 year-end results conference call. With me today are Greg Hicks, President and CEO, Gregory Craig, Executive Vice President and CFO, and TJ Flood, Executive Vice President and President of Canadian Tire Retail. Before we begin, I wanted to draw your attention to the earnings disclosure, which is available on the website. It includes cautionary language about forward-looking statements, risks and uncertainties, which also apply to the additional material included this quarter to help you better understand the results discussion during the call. After our remarks today, the team will be happy to take your questions. We'll try to get as many questions as possible. but ask that you limit your time to one question plus a follow-up before cycling back into the queue. And we welcome you to contact Investor Relations if we don't get through all the questions today. I'll now turn the call over to Greg.

Thank you, Karen. Good morning and welcome, everyone. I'll start by saying that our Q4 and full year 2023 results fell short of our expectations. Even when normalized for the unusual items that came our way in 2023, Our quarterly and annual EPS ended well below 2022. This past year was challenging, more so than we expected at the outset, given rising interest rates, stubborn inflation impacting discretionary spend, and unfavorable weather. But we believe these headwinds are temporary. We faced unfavorable weather throughout the year, especially in Q4. We estimate that weather accounted for around half of the comparable sales decline in the quarter. The team once again proved their unrelenting ability to work through and execute against the macroeconomic environment and other headwinds while also building for the future. I sincerely thank them for living our core values and our brand purpose that we are here to make life in Canada better, no matter the circumstances. While we have made progress over the years in weatherproofing our business, we live and operate in Canada, where weather can be unpredictable. That said, we know we need to be well-stocked in weather-related categories to support our customers' seasonal needs. Despite the headwinds we faced in 2023, we remain committed to transforming CTC through our Better Connected Strategy, which will make Canadian Tire an even stronger competitor in the future. Since introducing our strategy in March of 2022, we have invested $1.4 billion in capital, with the vast majority of that spend targeted for growth initiatives, including new and remodeled stores, new and expanded distribution centers with automation, and upgrades to our technology infrastructure. We have also significantly improved our operating capabilities, our customer-facing websites, our mobile footprint, and our privileged own brands capabilities. Our Triangle Rewards membership remains healthy and engaged and provides us line of sight into the health of the Canadian consumer and their specific needs. Heading into 2024, we are placing heightened attention on our financial flexibility and controlling what we can control while mitigating what we can't. Our team is critically focused on maximizing leverage including our operating leverage, our existing assets and investments, and our strong relationships we've built through Triangle Rewards. I will provide more color on all three areas, but before I do, I'm going to hand it over to Gregory to unpack our results.