Canadian Tire Corporation, Limited

Thank you for standing by. My name is Lauren Cannon 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, simply press star one one on your telephone keypad. To withdraw your question, please press star one one. Now I will pass along to Karen Keyes Head of Investor Relations for Canadian Tire Corporation. Karen.

Thank you, Lauren, and good morning, everyone. Welcome to Canadian Tire Corporation's second quarter 2025 results conference call. With me today are Greg Hicks, President and CEO, Executive Vice President and CFO, Darren Myers, and TJ Flood, Executive Vice President and Chief Operating Officer. Before we begin, I'd like to highlight the earnings disclosure, which is available on our website. It includes cautionary language about forward-looking information and the factors, risks, and uncertainties which may cause actual results to differ materially from those expressed or implied, which also apply to the discussion during today's conference call. I would highlight that our discussion today will focus on the results of the business on a continuing operations basis. By way of reminder, the sale of Helly Hansen completed on May 31st, with the business being treated as a discontinued operation in our results up to that date. After our remarks today, the team will be happy to take your questions. We'll try to get in as many as we can, but ask that you limit your time to one question plus a follow-up before cycling back in the queue. And we welcome you to contact Investor Relations if we don't get through all the questions today. And with that, I'll turn the call over to Greg.

Thank you, Karen, and good morning, everyone. Q2 was a strong quarter with robust top-line growth and improvements across our customer metrics. It was concrete proof of our team's ability to successfully balance the dual tasks of performing our business while transforming our company. In what is always our most discretionary quarter, customers turn to us for the products they need and want for life in Canada, demonstrating a continued demand for value with an increased willingness to spend. In Q2, the customer metrics that matter were effectively green across the board. Comp sales were up 6.4% at CTR, 3.9% at SportCheck, and 1% at Marks, driven by increases across discretionary, essential, seasonal, and non-seasonal products. We experienced growth in both loyalty and non-loyalty sales with increases in traffic and basket size, good signs for our business and consumer health alike. Sales and revenue drove our stronger retail gross margin as we managed through a dynamic cost environment, which Darren will unpack shortly. Ultimately, normalized EPS was down 4% to $3.57, as strong growth in our underlying retail business was offset by investments in our True North strategy. As we expected, we are balancing short-term results with our strategic investments all with the goal of generating long-term shareholder value. We entered 2025 buying for growth with the promise that when customers were ready to shop, our stores would be ready to serve. That mindset paid off through the first half of this year, but especially in Q2, as customer confidence showed signs of recovery from March lows. In the face of continued uncertainty, consumer confidence is rising, but still low, relatively speaking. So we continue to monitor employment levels and demand in markets with greater exposure to tariff risks. On balance, we like what we see in the customer data. Loyalty spend is up across every income level we track. Credit card spend at CTR has grown faster than our competitors for three consecutive quarters. Canadians are spending more of their discretionary dollars with us. Our value perception is up, and we are gaining market share. Further, while it's tough to quantify, we have no doubt that patriotic purchasing is real and working in our favor. Simply put, Canadians are visiting us more. And while we've been number one in brand trust for years, our internal data shows we've widened the gap between Canadian Tire and our field of global competitors. This is all welcome momentum as we look to maximize near-term retail performance and transform for long-term prosperity. I'll now hand it to Darren to walk you through the details of our performance, and I'll return to highlight our progress on our True North transformation.