Q4 2021 Canadian Tire Corporation Ltd Earnings Call

February 17, 2022

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Thank you for standing by. My name is Marie 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.

Thank you for standing by my name is Marie 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.

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Now I will be passing along to Karen <unk> head of Investor Relations for Canadian Tire Corporation Cameron.

Now I will be passing along to Karen Keyes, Head of Investor Relations for Canadian Tire Corporation. Karen?

Thank you Murray and good morning, everyone welcome to Canadian Tire Corporation's fourth quarter, and 2021 year end results conference call with.

Thank you, Marie, and good morning, everyone. Welcome to Canadian Tire Corporation's fourth quarter and 2021 year-end results conference call. With me today are Greg Hicks, President and CEO , Gregory Craig, Executive Vice President and CFO , and TJ Flood, President of Canadian Tire Retail.

With me today are Greg Hicks, President and CEO , Gregory Craig Executive Vice President and CFO and T. J slide President of Canadian tire retail.

Before we begin, I wanted to draw your attention to the earnings disclosure which is available on the website and includes cautionary language about forward-looking statements, risks and uncertainties which also apply to the discussion during today's conference call.

Before we begin I wanted to draw your attention to the earnings disclosure, which is available on the website and includes cautionary language about forward looking statements risks and uncertainties, which also apply to the discussion during today's conference call.

After our remarks, we'll be happy to take your questions, we will try and get in as many questions as possible, but we ask that you limit your time to one question plus a follow up before cycling back into the queue.

After our remarks, we'll be happy to take your questions. We will try and get in as many questions as possible, but we ask that you limit your time to one question plus a follow-up before cycling back into the queue. And with that, I'll turn the call over to Greg.

And with that I'll turn the call over to Greg.

Thank you Karen good morning, and welcome everyone.

Before we get into the details of our Q4 and full year results, I want to start by reminding everyone that this year, Canadian Tire is celebrating its 100th birthday.

Before we get into the details of our Q4 and full year results I want to start by reminding everyone that this year Canadian tire is celebrating its 101st day.

That's 100 years of being here to make life in Canada, better not just through the products, we sell and the services we offer but also the support our teams provide to our communities.

That's 100 years of being here to make life in Canada better. Not just through the products we sell and the services we offer, but also the support our teams provide to our community.

One of the ways we do this is through Jumpstart, which helps kids overcome barriers to sport and play. And that includes barriers created by the pandemic.

One of the ways. We do this is through jumpstart, which helps kids overcome barriers to support in play and that includes barriers created by the pandemic.

Since Q4 of 2020, Jumpstart has disbursed $25 million through the Sport Relief Fund to help nearly 2,300 organizations keep their doors open.

Q4 of 2020, Jumpstart has dispersed $25 million through the sport relief fund to help nearly 2300 organizations keep their doors open.

This funding ensured that more than 220,000 kids could return to their teams and community organizations once it was safe.

Funding ensured that more than 220000 kits could return to their teams and community organizations. Once it was safe to do so at.

At the same time jumpstart continued to move forward with its commitment to removing accessibility barriers to support in play.

At the same time, Jumpstart continued to move forward with its commitment to removing accessibility barriers to sport and play.

Since we first announced our commitment to building a more inclusive Canada in 2017, Jumpstart has disbursed $23.8 million through its Inclusive Play project.

Since we first announced our commitment to building a more inclusive Canada in 2017, jumpstart has dispersed $23 $8 million through its inclusive play project.

Last year alone Jumpstart completed the construction of three inclusive multi-sport courts and five inclusive playgrounds.

Last year alone Jumpstart completed the construction of three inclusive multi sport courts and five inclusive playgrounds.

I'm pleased to report that our charity is on track to achieve their goal of constructing at least one Jumpstart playground in every province and territory by 2020.

I'm pleased to report that our charity is on track to achieve their goal of constructing at least one jumpstart playground in every province and territory by 2023.

I think it's worth mentioning that through the construction of jumpstart playgrounds in 2021, 45000 tires were diverted from landfills.

I think it's worth mentioning that through the construction of JumpStart Playgrounds in 2021, 45,000 tires were diverted from landfill.

The recycled crumb rubber is used to create the playground's safe and accessible surface.

Recycled crum rubber is used to create the playground safe and accessible surfaces.

Another Great example of our innovative sustainability initiatives is that marks where we recently launched a pilot program to recycle our flexible plastics.

Another great example of our innovative sustainability initiatives is at MARCS, where we recently launched a pilot program to recycle our flexible plastic.

We're only a few months into this project and in Q4 alone marks diverted two and a half tons of flexible plastics, which is equivalent to 250000 plastic water bottles.

We're only a few months into this project and in Q4 alone, Mark's diverted two and a half tons of flexible plastics, which is equivalent to 250,000 plastic water bottles.

These are just a few examples of our many sustainability initiatives which together help contribute to corporate nights, once again naming us among the most sustainable retailers in Canada and listing us as one of their global 100 most sustainable corporations.

Is there just a few examples of our many sustainability initiatives, which together helped contribute to corporate Knights once again naming us among the most sustainable retailers in Canada and listing us as one of their global 100, most sustainable corporations.

Achievement is a testament to our continued efforts across our ESG practices and I'm. So proud to see our teams work recognized on a global scale.

This achievement is a testament to our continued efforts across our ESG practices, and I'm so proud to see our team's work recognized on a global scale.

But as I've said before, we know that ESG is a process, not a project, and our work can...

But as I've said before we know that ESG is a process not a project and our work continues.

With that let's get into our fourth quarter and full year results.

With that, let's get into our fourth quarter and full year results.

Our exceptional results in the fourth quarter concluded what has been a record year for CTC.

In the quarter, we delivered strong comp store sales growth of 11%, with double-digit increases across most banners.

In the quarter, we delivered strong comp store sales growth of 11%.

With double digit increases across most banners revenue.

Revenue, excluding petroleum, was up 3% against strong comparatives and an extra week in Q4 of last year. And EPS was up 5%, reflecting strong performance in our retail segment.

Excluding petroleum was up 3% against strong comparative and an extra week in Q4 of last year and EPS was up 5%, reflecting strong performance in our retail segment.

These record results in the quarter cap off an exceptional 2021, with comparable sales up 8%, revenue excluding petroleum up 9%, and e-commerce sales up a remarkable 30%, reaching $2 billion for the year.

These record results in the quarter capped off an exceptional 2021 with comparable sales up 8% revenue, excluding petroleum up 9% and e-commerce sales up a remarkable 30%, reaching $2 billion for the year.

We finished the year incredibly strong on EPS with the quarter above $8 full year EPS jumped to a record level of nearly $19 an increase of almost 50% compared to 2020.

We finished the year incredibly strong on EPS. With the quarter above $8, full year EPS jumped to a record level of nearly $19, an increase of almost 50% compared to 2020.

There's no question this was another challenging year and I'm so pleased with and proud of our results. But I'm certainly not surprised for a number of reasons.

There's no question.

This was another challenging year and I'm, so pleased with and proud of our results, but I'm certainly not surprised for a number of reasons.

First, after nearly two years of COVID-related uncertainty and anxiety, our team members continue to step up for our customers, our communities, and each other.

First after nearly two years of Covid related uncertainty and anxiety our team members continue to step up for our customers our communities and each other.

I'm so grateful for their hard work, their innovative ideas and their unshakable commitment to our brand purpose of being here to make life in Canada better.

I'm, so grateful for their hard work their innovative ideas and their unshakable commitment to our brand purpose of being here to make life in Canada better.

Second, we successfully anticipated the wants and needs of our customers who are facing another Christmas spent at home while also considering the needs of those getting back on the road and back to the ring.

Second we successfully anticipated the wants and needs of our customers who are facing another Christmas spent at home. While also considering the needs of those getting back on the road and back to the rink as.

As expected Christmas automotive than hockey were the biggest drivers of our sales in Q4.

As expected, Christmas, automotive and hockey were the biggest drivers of our sales in Q4. Our strong inventory position enabled us to help Canadians make the most of their Christmas traditions and festivities by having everything they wanted and needed to celebrate the season, from Christmas trees and decorations to sporting goods.

Our strong inventory position enabled us to help Canadians make the most of their Christmas traditions and festivities by have everything everything they wanted or needed to celebrate the season from Christmas trees, and decorations, just sporting goods and toys.

I also want to add that in the quarter, 40% of our sales across our banners were driven by our own brand.

I also want to add that in the quarter, 40% of our sales across our banners were driven by our own brands.

Across the North American retail industry scarcity of inventory and pricing have led to a tremendous amount of brand switching by customers and private labels have benefited from this trend.

Across the North American retail industry, scarcity of inventory and pricing have led to a tremendous amount of brand switching by customers and private labels have benefited from becoming retaliatory.

Unlike many other retailers, we were well positioned to take advantage of this trend because we've put considerable effort and energy into developing or acquiring own brands that provide both quality and value, such as Canvas, NOMA, Sherwood, and Wind River, to meet our customers' needs across our band.

Unlike many other retailers, we were well positioned to take advantage of this trend because we have put considerable effort and energy into developing or acquiring owned brands that provide both quality and value.

As canvas Noma, Sherwood and wind river to meet our customers' needs across our banners.

Third we have incredible capabilities that enable us to withstand even the most unprecedented of challenges.

Third, we have incredible capabilities that enable us to withstand even the most unprecedented of challenges.

Our strengthened omni-channel capabilities made it easy for customers to shop in whatever way they chose.

Our strength in Omnichannel capabilities made it easy for customers to shop in whatever way they chose.

Even with our stores open for in-store shopping, customers also turn to Digital, Click & Collect, and our pickup lockers to help them fulfill their wants and needs.

Even with our stores open for in store shopping customers also turned to digital click and collect and our pickup lockers to help them fulfill their wants and needs.

Our E Commerce sales reached $5 billion in the fourth quarter, our penetration rate nearly double that of pre pandemic levels.

Our e-commerce sales reached half a billion dollars in the fourth quarter. A penetration rate nearly doubled at a pre-pandemic level.

And as I mentioned last quarter, our strong supply chain capabilities and experienced management team.

And as I mentioned last quarter, our strong supply chain capabilities and experience management team enabled us to navigate considerable challenges.

Enabled us to navigate considerable challenges, including the flooding and mudslides we saw in November .

including the flooding and mudslides we saw in November . As a result, we remain well stocked with the products our customers wanted and needed during the holidays.

As a result, we remain well stock with the products our customers wanted and needed during the holidays.

Given the ongoing and significant supply chain challenges, we are continuing to build lead times into our supply chain processes as we assume that from sourcing to arrival at our distribution centers orders will take longer than in previous years.

We also ordered earlier for offshore sourcing and continue to ensure we have incremental shipping capacity by chartering our own vessels, if and when required.

We also ordered earlier for offshore sourcing and continue to ensure we have incremental shipping capacity by chartering our own vessels if and when required.

Between our team's incredible focus on execution are rock solid supply chain capabilities, and the strength and relevance of our multi category assortment and our bolstered omnichannel capabilities, we were well positioned to win in 2021 and the results speak for themselves.

Between our team's incredible focus on execution, our rock-solid supply chain capabilities, and the strength and relevance of our multi-category assortment and our bolstered omnichannel capabilities, we were well positioned to win in 2021 and the results speak for themselves.

At this time I want to spend a few minutes talking about our triangle credit card and our triangle rewards program.

At this time, I want to spend a few minutes talking about our Triangle Credit Card and our Triangle Rewards program.

New credit members increased 36% versus Q4 of last year.

New credit members increased 36% versus Q4 of last year. With a more digitally focused credit card acquisition strategy, our new credit card member acquisition increased by almost 50% compared to 2020. Since 2019, we've doubled the number of customers acquired through digital channels.

With a more digitally focused credit card acquisition strategy, our new credit card member acquisition increased by almost 50% compared to 2020.

Since 2019, we've doubled the number of customers acquired through digital channels.

We also set a new record in the quarter when we welcomed more than 770,000 new members to our Triangle Rewards program.

We also set a new record in the quarter when we welcomed more than 770000, new members to our triangle rewards program.

For the year as a whole we attracted two 4 million new members to the program.

For the year as a whole, we attracted 2.4 million new members to the program, 39% more than the cohort we attracted last year.

39% more than the cohort we attracted last year.

We are thrilled to be growing our membership base because as I mentioned last quarter members spend more their average basket size is higher and they shop across multiple banners and channels.

We're thrilled to be growing our membership base because, as I mentioned last quarter, members spend more. Their average basket size is higher and they shop across multiple banners and channels.

Case in point in 2021, total loyalty spend increased 11%, representing 58% of retail sales and outperforming total Pos growth of 8%.

Case in point in 2021, total loyalty spend increased 11%, representing 58% of retail sales and outperforming total POS growth of 8%.

Our triangle rewards members basket size continues to outpace non member basket size with the average member basket being 30% higher than non loyalty.

Our Triangle Rewards members basket size continues to outpace non-member basket size with the average member basket being 30% higher than non-loyal.

And last year more than half of our triangle rewards members shopped across multiple banners exceeding our planned target for the year.

And last year, more than half of our Triangle Rewards members shopped across multiple banners, exceeding our planned target for the year. But there's more to this story than simply growing our number of members.

But there is more to the story than simply growing our number of members. It's also about what type of members we are attracting.

A large portion of the 2021 cohort is made up of a younger customer demographic, a shift we're very happy to see.

A large portion of the 2021 cohort is made up of a younger customer demographic a shift we're very happy to see.

Our data suggests that the millennial generation is departing major cities to adopt suburban and rural lifestyles, and both our assortment and multiple shopping options are leading to the emergence of millennials as a key component of our Triangle membership customer base.

Our data suggests that the millennial generation is departing major cities to adopt suburban and rural lifestyles and both our assortment and multiple shopping options are leading to the emergence of millennials as a key component of our triangle membership customer base.

We've also seen a shift in terms of where our members are coming from <unk>.

We've also seen a shift in terms of where our members are coming.

Previously, we would acquire the majority of our new members at CTR, and many of those members would subsequently shop across our other banners.

Previously we would acquire the majority of our new members at Ctr and many of those members would subsequently shop across our other banners in 2021, however, nearly half of the new members. We acquired were at sport Chek in marks and now those members are shopping at Ctr for the first time.

In 2021, however, nearly half of the new members we acquired were at Sportcheck and Marks, and now those members are shopping at CTR for the past year.

It's evident that customers see real value in being part of the Triangle Rewards program and we're thrilled to see more and more Canadians experience and shop across our banners and brands, some for the first time thanks to the power of trust.

It is evident that customers see real value in being part of the triangle rewards program and we're thrilled to see more and more Canadians experienced in shop across our banners and brands. Some for the first time, thanks to the power of triangle.

2021 also marked one year since we integrated party city and our triangle rewards program.

2021 also marked one year since we integrated Party City in our Triangle Rewards program.

As a reminder, part of our strategic rationale for acquiring Party Cities Canadian business in 2018 was to not only add new categories but a new customer experience.

As a reminder, part of our strategic rationale for acquiring party city's Canadian business in 2019 was to not only add new categories, but a new customer base we.

We were confident that by adding Party City to Triangle Rewards, it would further strengthen and expand the program by bolstering its appeal to Millennials and Canadian families.

We were confident that by adding party city to triangle rewards. It would further strengthen and expand the program by bolstering its appeal to millennials and Canadian families.

It turns out we were right.

Our Party City standalone store comparable sales were up 26% in 2021, and the party supply category within CTR stores is now a significant category with considerable room for growth.

Our party city Standalone store comparable sales were up 26% in 2021.

And the party supply category within Ctr stores is now a significant category with considerable room for growth.

Although these are excellent results in their own right. What we've what we're even more excited to see as the triangle is already helping drive engagement and trips to party city.

Although these are excellent results in their own right, what we're even more excited to see is that Triangle is already helping drive engagement and trips to Party City.

I'm going to take a few minutes to give you. Some additional color on this specific late because our results with party city are a fantastic illustration of the power of our triangle rewards loyalty program.

I'm going to take a few minutes to give you some additional color on this specifically, because our results with Party City are a fantastic illustration of the power of our

First there were 380000 triangle members, who shopped at party city last year, which represents 20% of total sales.

First, there were 380,000 Triangle members who shopped at Party City last year, which represents 20% of total sales.

What's also interesting is that over 95% of these members also shopped at Ctr and their average sales per member at Ctr was 65% higher than the average spend of loyalty customers, who shop only at Ctr.

What's also interesting is that over 95% of these members also shopped at CTR and their average sales per member at CTR was 65% higher than the average spend of loyalty customers who shop only at CTR.

In other words, Triangle Rewards members who shop at Party City spend more at CTR.

In other words triangle rewards members, who shop at party city spend more at Ctr.

Second these 380000 members over index in the 30 to 49 year old segment and are more likely to have kids.

Second, these 380,000 members over-index in the 30 to 49 year old segment and are more likely to have kids.

Third, three quarters of these 380,000 members have given us permission to contact them directly, either by email or through our app for potential digital campaigns, which is much higher than for the typical CTR shop.

Third three quarters of these 380000 members have given us permission to contact them directly either by E mail or through our app for potential digital campaigns, which is much higher than for the typical ctr shopper.

So the party city acquisition is doing exactly what we intended as our investment thesis.

So the Party City acquisition is doing exactly what we intended as our investment...

It's attracting new highly engage customers to the triangle rewards program, it's increasing the relevance of our offering to our members.

It's attracting new, highly engaged customers to the Triangle Rewards program. It's increasing the relevance of our offering to our members. And it's driving increased sales.

And it's driving increased sales at Ctr.

We continue to add more of our banners into the Triangle program as we recently did with Pro Hockey Life, just in time for the return to hockey.

We continue to add more of our banners into the triangle program as we recently did with pro hockey life, just in time for the return to hockey.

To close out my prepared remarks on our triangle rewards program with more loyalty members improved engagement in the program and more ways to earn Canadian tire money. It's no surprise that we continue to have record years in terms of both issuance and redemption of CTF.

To close out my prepared remarks on our Triangle Rewards program, with more loyalty members, improved engagement in the program and more ways to earn Canadian Tire money, it's no surprise that we continue to have record years in terms of both issuance and redemption of ECTF.

Our year-end ECTM balance increased significantly compared to 2020, which we believe to be a healthy indicator of future engagement with our balance.

Our year end <unk> balance increased significantly compared to 2020.

Which we believe to be a healthy indicator of future engagement with our banners.

Before I turn it over to Gregory to review our results in more detail, I wanted to provide my thoughts on our financial services business performance.

Before I turn it over to Gregory to review our results in more detail I wanted to provide my thoughts on our financial services business performance.

I'm extremely pleased with the portfolio metrics the business is delivering.

From the risk levels that remain near all-time historic lows to our growth in credit card sales and active accounts in the quarter, the metrics for the business remain strong.

From the risk levels that remain near all time historic lows to our growth in credit card sales and active accounts in the quarter the metrics for the business remains strong.

And while income before tax may be down in the quarter compared to last year, the way I think about the business is by considering income excluding any changes in the ECL.

And while income before tax may be down in the quarter compared to last year. The way I think about the business is by considering income excluding any changes in the ECL.

This provides me with a sense of how the underlying business is performing almost on a cash basis and on this basis earnings excluding any change to the ECL increased in the quarter by 6%, while we grew our new credit card customers truly a great result.

This provides me with a sense of how the underlying business is performing, almost on a cash basis.

And on this basis, earnings, excluding any change to the ECL, increased in the quarter by 6% while we grew our new credit card customers.

And with that, I'll hand the call over to Gregory to take you through the financial highlights of the year and the quarter.

And with that I'll hand, the call over to Gregory to take you through the financial highlights of the year in the quarter.

Thanks, Greg and good morning, everyone 2021 was an exceptional year and I will focus most of my comments on Q4 performance. However, I do want to start off with a few full year highlights.

Thanks, Greg. And good morning, everyone. 2021 was an exceptional year, and I will focus most of my comments on Q4 performance. However, I do want to start off with a few full year highlights.

Further to Greg's comments, I could not be more pleased with our great finish in Q4, leading to a record-setting $18.38 in diluted EPS for the year, up 49% compared to 20%.

Further to Greg's comments I could not be more pleased with our great finish in Q4, leading to a record setting $18 38.

And diluted EPS for the year up 49% compared to 2020.

2021 marked another year of exceptional top line growth with comparable sales up over 8% for the year growing off of a 10% increase from a year ago.

2021 marked another year of exceptional top line growth, with comparable sales up over 8% for the year, growing off of a 10% increase from a year ago. On top of that, we achieved an outstanding 13.6% in our retail return on invested capital. One of our key.

On top of that we achieved an outstanding 13, 6% in our retail return on invested capital.

One of our key performance metrics now before I just start to discuss the quarter.

Now, before I just start to discuss the quarter, I just wanted to take care of a few reminders. As you recall, 2020 had an extra week and consistent with our past practices.

Just wanted to care of a few reminders.

As you recall 2020 had an extra week and consistent with our past practices.

we've been calculating comparable sales growth on a shifted basis.

<unk> been calculating comparable sales growth on a shifted basis for example, our sales and week 52, this year or compared to sales from in week 53 in the prior year.

For example, our sales in week 52 this year are compared to sales from in week 53 in the prior year.

In contrast, retail sales and revenue growth are calculated without any adjustments and due to an extra week in the comparative period in 2020, both revenue and sales growth rates are noticeably lower than comparable sales growth.

In contrast, retail sales and revenue growth are calculated without any adjustments, and due to an extra week in the comparative period in 2020, both revenue and sales growth rates are noticeably lower than comparable sales growth.

Now, let's get into the results in the quarter starting with EPS.

Now, let's get into the results in the quarter, starting with EPS or.

Our strong top line and gross margin translated into exceptional earnings growth in the quarter, we reported diluted EPS of $8.34 an increase of 5%.

our strong top line in gross margin translated into exceptional earnings growth in the quarter. We reported diluted EPS of $8.34, an increase of 5%. And I should remind you that this result comes off on the back of an exceptional EPS growth of 47% last year.

And I should remind you that this result comes up on the back of an exceptional EPS growth of 47% last year.

After normalizing for $6 5 million in operational efficiency expenses normalized diluted EPS was $8 42 to.

After normalizing for $6.5 million in operational efficiency expenses, normalized diluted EPS was $8.42, two cents ahead of last year.

<unk> ahead of last year.

Our retail business continued to show strong momentum in the quarter, delivering 60 million and year over year IDT growth.

Our retail business continued to show strong momentum in the quarter, delivering 60 million in year over year IBT growth.

And while financial services recorded an increase in sales strong operational and credit performance metrics profitability was impacted by a higher allowance as a result of increased customer acquisition and a growing receivables volume, which I will discuss further in a few minutes.

And while financial services recorded an increase in sales, strong operational and credit performance metrics, profitability was impacted by a higher allowance as a result of increased customer acquisition and a growing receivables volume, which I will discuss further in a few minutes.

If we consider the key drivers of growth in our retail business I would start with sales as Greg mentioned, our consolidated comparable sales grew 11% in the quarter.

If we consider the key drivers of growth in our retail business, I would start with sales.

As Greg mentioned, our consolidated comparable sales grew 11% in the quarter.

while retail revenue, excluding petroleum, was up 3%.

While retail revenue, excluding petroleum was up 3%.

Truly fantastic results off of an exceptional Q4, a year ago.

truly fantastic results off of an exceptional Q4 a year ago.

Our comparable sales performance was consistently strong across all of our banners. So I'd like to share some highlights for each of them starting with ctr.

Our comparable sales performance was consistently strong across all of our banners. So I'd like to share some highlights for each of them, starting with CTR.

<unk> comp sales were up 10% in the quarter and up 23% on a two year stack basis.

CTR comp sales were up 10% in the quarter and up 23% on a two year stack basis.

On top of significant growth in 2020, 75% of categories grew this quarter, and about half of them achieved double-digit growth. A clear sign...

On top of significant growth in 2020, 75% of categories grew this quarter and about half of them achieved double digit growth.

A clear sign this was a broad based performance.

Automotive seasonal and playing with a top divisions and drilling into the category level, our Christmas and tire categories stood out.

Automotive, seasonal, and playing were the top divisions. When drilling into the category level, our Christmas entire categories stood out.

As a result of our team's proactive approach to securing product.

As a result of our team's proactive approach to securing product, combined with their strong understanding of customer needs, our must-win businesses in the quarter excelled, with tires up 17% and Christmas categories up 21% on top of 41% a year ago.

Combined with their strong understanding of customer needs, our must win businesses in the quarter excelled with tires up 17% and Christmas categories up 21% on top of 41% a year.

Year ago.

With the return to sports, another category which saw exceptional growth was hockey. At both CTR and pro hockey life, our hockey business increased 50% and 90% respectively.

With the return to sports another category, which saw exceptional growth was hockey.

Both Ctr and pro hockey life, our hockey business increased 50% and 90% respectively.

A brief comment on Ctr sales and revenue pattern, which has been appointed discussion over the past few quarters.

A brief comment on CTR sales and revenue pattern, which has been a point of discussion over the past few quarters.

following some significant divergence in the revenue and retail sales pattern at CTR throughout the year. On a two-year stack basis, retail sales grew 23% while two-year stack revenue was up 22%.

Following some significant divergence in the revenue and retail sales pattern at ctr throughout the year on a two year stack basis retail sales grew 23%, while two year stack revenue was up 22%.

As we have pointed out in the past, over the long term, the growth patterns for these two metrics tend to converge. And we're observing this trend come more in line with our historical observations.

As we have pointed out in the past over the long term the growth patterns for these two metrics tend to converge and we're observing this trend come more in line with our historical observations.

As I move to cover sport check-in marks, I can't stress enough how pleased we are with the performance of these two banners and how well they fared throughout the pandemic.

As I move to cover sport Chek in marks I can't stress enough. How pleased we are with the performance of these two banners and how well they fared throughout the pandemic.

at SportCheck, comp sales increased an impressive 16% driven by strong consumer demand, improved assortment depth in key categories, and a fully operational store network compared to a year ago.

Sport Chek.

Comp sales increased an impressive 16% driven by strong consumer demand improved assortment depth in key categories and are fully operational store network compared to a year ago.

Hockey was up an impressive 78% in categories, such as athletic footwear athletic clothing, and casual clothing, all experienced double digit growth.

Hockey was up an impressive 78% and categories such as athletic footwear, athletic clothing, and casual clothing all experienced double-digit growth.

Now turning to marks building off its strongest Q4 and record it delivered a 15% comparable sales growth in the quarter.

Now, turning to Mark's. Building off its strongest Q4N record, it delivered a 15% comparable sales growth in the quarter.

With all stores fully operational in the quarter, our bricks and mortar demand saw a significant uptick. Our data and analytic capabilities allowed us to invest in the right inventory to support growth, and our decision to buy heavily in key product categories such as casual footwear, menswear, and industrialwear reaped rewards.

With all stores fully operational in the quarter, our bricks and mortar demand saw a significant uptick.

Our data and analytic capabilities allowed us to invest in the right inventory to support growth in.

And our decision to buy heavily in key product categories.

<unk>, such as casual footwear, menswear, and industrial where reaped rewards.

Helly Hansen also had a strong quarter delivering Q4 revenue growth of 28% with growth across all categories.

Kelly Hansen also had a strong quarter, delivering Q4 revenue growth of 28%, with growth across all categories.

The strongest contributor in the quarter was the Sports Wholesale Division, up 28% and representing over 62% of Helle's total business.

The strongest contributor in the quarter was the sports wholesale division up 28% and representing over 62% of <unk> total business.

Geographically the U S saw the strongest uptake in demand followed by Europe , and Scandinavia, and we were very pleased with 29% growth in Canada.

Geographically, the US saw the strongest uptick in demand, followed by Europe and Scandinavia, and we were very pleased with 29% growth in Canada.

Moving down the P&L, let's look at margin reached.

Retail gross margin rate, excluding petroleum increased significantly up 204 basis points compared to prior year.

Retail gross margin rate, excluding petroleum, increased significantly, up 204 basis points compared to prior year.

The margin rate improvement was mainly driven by an increased rate at ctr as you know key operational activities undertaken by the corporation and our dealers to drive enterprise performance in the last two years have resulted in a higher overall level of profitability.

The margin rate improvement was mainly driven by an increased rate at CTR. As you know, key operational activities undertaken by the corporation and our dealers to drive enterprise performance in the last two years have resulted in a higher overall level of profitability.

As a result of this, we've recognized higher benefits associated with our sharing arrangements with the dealers. The bulk of these benefits are typically recorded in Q4 and this was the case again this quarter.

As a result of this we've recognized higher benefits associated with our Shang arrangements with the dealers.

The bulk of these benefits are typically recorded in Q4 and this was the case again this quarter.

Partially offsetting our margin gains were higher freight costs as we highlighted earlier in 2021 due to a more challenging supply chain environment, we continue to monitor and manage these freight costs across the enterprise.

Partially offsetting our margin gains were higher freight costs as we've highlighted earlier in 2021 due to a more challenging supply train environment. We continue to monitor and manage these freight costs across the enterprise.

Impressively, Sportcheck and Mark's margin rates also increased.

Impressively sport Chek in Mark's margin rates also increased and while both banners benefited from a higher mix of bricks and mortar shopping at marks margin improved primarily as a result of the data driven enhancements in our promotional activity.

And while both banners benefited from a higher mix of bricks and mortar shopping, at Mark's, margin improved primarily as a result of the data-driven enhancements in our promotional activity, while SportCheck saw lower promotional and clearance activity due to cleaner, healthier inventory positions.

While sport Chek saw lower promotional and clearance activity due to cleaner healthier inventory positions.

Our normalized Opex, our normalized consolidated opex ratio as a percent of revenue came in at 23, 3% unfavorable by 192 basis points compared to 2020.

Our normalized consolidated opex ratio as percent of revenue came in at 23.3%, unfavorable by 192 basis points compared to 20.

This increase in the quarter was primarily due to higher variable compensation costs marketing and supply chain costs.

This increase in the quarter was primarily due to higher variable compensation costs, marketing, and supply chain costs.

For marketing, we indicated in Q3 that spending was starting to return to more historic levels. In Q4 in particular, one of the drivers of marketing spend was at financial services as we increased our credit card acquisition.

For marketing we indicated in Q3 that spending was starting to return to more historic levels in Q4 in particular, one of the drivers of marketing spend was that financial services as we increased our credit card acquisition.

On supply chain, we continue to see a higher spend as a result of the challenging supply chain backdrop.

On supply chain, we continue to see a higher spend as a result of a challenging supply chain backdrop. These increases were partially offset by savings achieved under our operational efficiency program.

These increases were partially offset by savings achieved under our operational efficiency program.

Last quarter, we spoke to achieving $200 million plus in annualized savings target a quarter early. These savings came through the implementation of more than 150 initiatives, with many of them focused on improvements in e-commerce fulfillment costs and store labor productivity.

Last quarter, we spoke to achieving $200 million plus in annualized savings target a quarter early.

Savings came through the implementation of more than 150 initiatives with many of them focused on improvements in e-commerce fulfillment costs and store labor productivity.

When we are thinking of the Opex ratio, we believe the clearest picture of progress is to compare our annual opex rate for the retail segment going back to 2019.

When we are thinking of the off-ex ratio, we believe the clearest picture of progress is to compare our annual off-ex rate for the retail segment going back to 2019.

This is for several reasons.

First this comparison excludes any impacts due to the pandemic and importantly, it accounts for the fact that operational efficiencies primary focus has been on the retail segment.

First, this comparison excludes any impacts due to the pandemic, and importantly, it accounts for the fact that operational efficiency's primary focus has been on the retail sector.

Finally, 2019 is the base year when our OE program launched.

Finally, 2019 is the base year, when our OA program launched with.

With this, our 2021 retail segment OpEx rate has improved more than 100 basis points since 2019.

With this our 2021 retail segment Opex rate has improved more than 100 basis points. Since 2019, although we are pleased with this performance. We continue to pursue further opportunities to optimize our operational leverage and improved profitability as we pursue another 100 million plus.

Although we are pleased with this performance, we continue to pursue further opportunities to optimize our operational leverage and improve profitability as we pursue another $100 million plus in run rate savings that we discussed last quarter.

<unk> savings that we discussed last quarter.

Finally.

Finally, I'd like to highlight several key impacts in our financial services business, which experienced an uptick in customer activity in the quarter while continuing to deliver strong operational metrics.

I'd like to highlight several key impacts in our financial services business, which experienced an uptick in customer activity in the quarter, while continuing to deliver strong operational metrics.

Credit card sales were up 25% this quarter, while spend across our CTC banners increased 23% compared to 2020.

We are pleased to report a 5% increase in our average active accounts Mark in Q4, as the highest quarter of average active accounts since the onset of the pandemic.

We are pleased to report a 5% increase in our average active...

marking Q4 as the highest quarter of average active accounts since the onset of the pandemic.

This trend was driven by increased customer engagement and the team's efforts on customer acquisition.

Active account growth was the most significant driver of GAR, which was up 6.3% in the quarter.

Active account growth was the most significant driver of Gar, which was up six 3% in the quarter.

Credit metrics remained very strong with the net write-off rate down 175 basis points in the quarter while our PD2 plus rate was essentially flat to the prior year.

Credit metrics remained very strong with the net write off write down of 175 basis points in the quarter, while our PD do plus rate was essentially flat to the prior year.

With a $320 million growth in ending receivables since Q3, we saw $30 million increase in allowance on our books.

With a $320 million growth in ending receivables since Q3, we saw a $30 million increase in allowance on our book.

This was in contrast to what we saw in Q4 last year when we had a $27 million decrease in allowance.

This was in contrast to what we saw in Q4 of last year when <unk>, when we had a $27 million decrease in allowance.

Reflecting primarily strong receivable growth allowance rate came in at 13, 2% in the quarter down 161 basis points from the prior year and comfortably within our target range of 11 five to 13, 5%.

reflecting primarily strong receivable growth, allowance rate came in at 13.2% in the quarter, down 161 basis points from the prior year, and comfortably within our target range of 11.5 to 13.5%.

With respect to our financial health, at the end of the year, our balance sheet was in strong position with all segments experiencing healthy liquidity.

With respect to our financial health at the end of the year, our balance sheet was in a strong position with all segments experiencing healthy liquidity.

Our operating capital spend came in line with the previously communicated range at $670 million.

our operating capital spend came in line with the previously communicated range at $670 million.

This was $359 million higher compared to the prior year as we drove higher spend in real estate and IT in support of our strategic capital agenda and some catch up from deferred projects in the prior year. As I have said before, investing in the business remains our key priority and I look forward to providing more color on 2022 capital priorities at our upcoming investor day.

This was $359 million higher compared to the prior year as we drove higher spend in real estate and <unk> in support of our strategic capital agenda, and some catch up from deferred projects in the prior year as I have said before investing in the business remains our key priority and I look forward to providing more color on 2022 capital priorities.

At our upcoming Investor day.

I remain incredibly proud of the team and what they have continued to accomplish over the last two years and I really look forward to reviewing our strategy and financial aspirations with you at our Investor day in a few short weeks.

With that I'd like to hand, it over to Greg for his closing remarks.

Thanks, Gregory overall, we are very pleased with how the business performed last year.

Thanks, Gregory. Overall, we are very pleased with how the business performed last year.

I want to take a moment to thank our leadership team, associate dealers and team members across the enterprise for their steadfast commitment to who we are and what we're in service.

I wanted to take a moment to thank our leadership team associated dealers and team members across the enterprise for their steadfast commitment to who we are and what we are in service of <unk>.

As CTC, we know our purpose. We're here to make life in Canada better.

CTC, we know our purpose, we're here to make life in Canada better.

And by doing this for our customers every day, we are achieving this for our shareholders as well by continuing to deliver strong results.

Before I close I want to give you some insight into what we're seeing so far in Q1.

Before I close, I want to give you some insight into what we're seeing so far in Q&A.

Quarter to date, we continue to see healthy demand signals from the customer in both our retail business, which continues to be up against strong comps and at our bank.

Quarter to date, we continue to see healthy demand signals from the customer in both our retail business, which continues to be up against strong comps, and at our bank, where we remain focused on growing our base of credit card holders and our receivables.

We remain focused on growing our base of credit card holders and our receivables.

Just a quick reminder, that a year ago, we were facing significant retail restrictions in Quebec, and Ontario, and the bulk of our Q1 sales came in the second half of the quarter.

Just a quick reminder that a year ago we were facing significant retail restrictions in Quebec and Ontario and the bulk of our Q1 sales came in the second half of the quarter.

The restrictions a year ago resulted in an elevated ecommerce penetration, which is unlikely to repeat in the current retail environment.

The restrictions a year ago resulted in an elevated e-commerce penetration, which is unlikely to repeat in the current retail environment.

In terms of the ongoing supply chain challenges, we continue to stay one step ahead.

In terms of the ongoing supply chain challenges, we continue to stay one step...

We order early for spring and summer, and in many cases, these products are arriving earlier than last year.

We ordered early for spring and summer and in many cases. These products are arriving earlier than last year.

Our year-end inventory increased by $168 million compared to the previous year, primarily due to an increase in our in-transit inventory at CTR, and this will ensure we continue to be in a position to meet demand.

Our year end inventory increased by $168 million compared to the previous year, primarily due to an increase in our in transit inventory at Ctr and this will ensure we continue to be in a position to meet demand.

I also want to mention inflation, as I know that topic has been on everyone's mind for the last few months.

I also want to mention inflation as I know that topic has been on everyone's mind for the last few months.

We are clearly operating in an environment where inflationary pressures are real, and we continue to look at demand elasticity drivers and use our triangle rewards program to promote how our assortment can deliver choice and value to customers.

We are clearly operating in an environment, where inflationary pressures are real and we continue to look at demand elasticity drivers and use our triangle rewards program to promote how our assortment can deliver choice and value to customers.

We are confident that we have the right business model for what looks to be a more inflationary environment as we move through 2022.

We are confident that we have the right business model for what looks to be a more inflationary environment as we move through 2020.

We look forward to giving you more insight into our strategy and unpacking, how we will continue to allocate capital as we invest in the health of our store network and modernize our business model at our Investor Day on March 10th.

We look forward to giving you more insight into our strategy and unpacking how we will continue to allocate capital as we invest in the health of our store network and modernize our business model at our Investor Day on March.

I'll now ill now pass it over to the operator to open it up for questions.

I'll now pass it over to the operator to open it up for questions.

Thank you.

At this time I would like to remind everyone in order to ask a question. Please press star one on your telephone keypad.

At this time, I would like to remind everyone, in order to ask a question, please press star 1 on your telephone keypad. You can withdraw your question by pressing star 2.

Can withdraw your question by pressing star two.

We ask that you limit yourself to one question plus one follow-up question before cycling back into the queue. We'll pause for just a moment to compile the Q&A roster.

We ask that you limit yourself to one question plus one follow up question before cycling back into the queue.

For just a moment.

Compile the Q&A roster.

The first question is from Irene <unk> from RBC capital markets. Please go ahead. Your line is now open.

The first question is from Irene Natal from RBC Capital Market. Please go ahead. Your line is now open.

Thanks, sorry, and good morning everyone. Obviously, really, really strong performance across the retail banners, but if we focus on CTR specifically.

Sorry, Ann good morning, everyone.

Obviously really really strong performance across the retail partners, but if we focus on ctr, specifically can you provide.

Can you provide more information around sort of the composition of the sales base? How much of sort of that growth is driven by big ticket items, kind of one-time purchases? And you mentioned something about average transactions. I'm wondering if you could provide more information on that, please.

More information around.

Sort of the composition of the sales base, how much of how much of sort of that growth is driven by a ticket item as kind of onetime purchases and you mentioned something about average transactions and wondering if you could provide more information on that please.

Well. Thanks, Good morning, Irene, it's Greg maybe I'll just kick it off and then hand it over to T. J. When we were preparing for this call as a as a team.

Well, thanks. Good morning, Irene. It's Greg. I'll just kick it off and then head over to TJ. When we were preparing for this call as a team last week, we anticipated this would be a question because we've heard it before. And one of the things that I was really interested in as we were going through some analysis is a breakdown of our retail sales by price point through the pandemic.

Last week we.

We anticipated this would be a question.

Because we've heard it before and one of the things that I.

He was really interested in as we were going through some analysis.

A breakdown of our retail sales by price point through the pandemic.

So maybe I'll just set the context here for you that over 90% of our assortment in CTR has a consumer price point of under $50, which represents 50% of our sales, and on a two year basis through the pandemic has represented over a third of our sales. Um, so overnight incoin patreon.com radio receiving sales, receive practiseFunApple, which is veryba.com.

So maybe I'll just set the context here for Ya that over 90% of our assortment in Ctr has a consumer price point of under $50, which represents 50% of our sales and on a two year basis through the pandemic has represented over a third of our sale.

<unk>.

So.

We we are certainly seeing widespread.

We are certainly seeing widespread growth in the business across the spectrum of price points. Items over $200 have also driven a third of our growth through the pandemic. I'll let TJ walk you through, I think you know where the key categories are, but he can give you a little bit more color than that. I just thought that was helpful context in terms of the composition of our sales through the pandemic by price point.

Growth in the business across the spectrum of price points items over $200 have also driven a third of our growth through the pandemic.

I'll, let T J walk you through.

What are the key categories are but he can give you a little bit more color.

Then that I just thought that was helpful context in terms of the composition of our sales through the pandemic by price point.

Absolutely. Yeah, I think, yeah, thanks for the question, Irene. I think Greg said it well. I think what's been driving our growth is the growth of our economy.

Absolutely I think.

Yeah. Thanks for the question I mean, I think Greg said, it well I think what's been driving our growth.

is the diversity of our assortment. Gregory touched on it in his section of the opening remarks. I mean, we had 76% of our categories grow in Q4 and 50% of those grew at double digits. So the pervasiveness and the diversity of our assortment has really been fueling our growth. And we've seen growth across all price points. We really have. And when you look at that, the fact that the vast majority of our sales volume has become.

Is the diversity of our assortment.

Gregory touched on it in his section of the opening remarks, I mean, we had 76% of our categories grow in Q4, and 50% of those grew at double digit so the pervasiveness and the diversity of our assortment has really been fueling our growth and we've seen growth across all price points.

We really have and when you look at that.

The fact that the vast majority of our sales volume comes.

below a $100 price point and with 50% of the sales volume coming below $50. And that has been a big contributor of our growth as well. I think you see that we've got a very diverse portfolio and we take great pride category by category making sure that we offer consumers choice at the good, better and best price levels within categories.

Below $100 price point, and with 50% of the sales volume coming below $50.

And that that has been a big contributor of our growth as well I think you see that we've got.

<unk> diverse portfolio and we take great pride.

Category by category, making sure that we offer consumers choice at the good better and best price levels within categories and that's what we're going to continue to do as we go forward is exposed value to consumers and provide them choice no matter, which categories. They choose and it's that diversity, that's going to kind of carry us forward here.

That's what we're going to continue to do as we go forward is expose value to consumers and provide them choice no matter which categories they choose and it's that diversity that's going to carry us forward here.

That's really helpful. Thank you so the follow up question.

That's really helpful, thank you. So follow-up question. As you think about the current environment with inflation, you know, at unit cost and through the supply chain, how do you think about the sort of breaking down the assortment between good, better, and best? And when we've been through prior periods like this in the past, how have you seen consumers respond and adjust?

As you think about the current environment with inflation.

Unit cost.

Through the supply chain, how do you think about it.

Breaking down the assortment between good better and best and then we've been through prior periods like this in the past how have you seen consumers respond and adjust.

Yes, maybe I'll take that.

Irene.

Irene, I would say if we're trying to isolate here for the impact price.

I would say if we're trying to isolate here for the impact price.

had on the top line in the quarter of the year, I'd say the story is similar for the quarter of the year. What we saw is that price had much less of an impact than volume.

Had you know on the top line in the quarter and the year I'd say the story is similar for the quarter and the year. What we saw is that price had much less of an impact on volume.

Our unit throughput was really strong across all of our business. Every banner has this storyline. So as we look forward...

Our unit throughput was really strong across all of our business every banner has the storylines. So.

As we as we look forward.

We our expectation is that this is going to come a little bit more into balance given the cost inflation that we're seeing in our business.

our expectation is that this is going to come a little bit more into balance given the cost inflation that we're seeing in our business.

Yes, you know, price is moving on to the customer, but we don't intend to give, as we've talked about before, we don't intend to give an inch competitively. As TJ has said before, I think our model continues to test elasticity to drive value for the customer. As it relates to the kind of the hierarchy of good, better, best, operation we mentioned earlier, and I think our model is used more served to the consumer and the misDM, lower cost that we bass E Also, we ti

Yes.

Rice is moving on to the customer, but we don't intend to as we've talked about before we don't intend to give an inch competitively.

T. J S said before I think our model continues to test the elasticity to drive value for the customer.

As it relates to the kind of the hierarchy of good better best.

It's more of the same in terms of what T. J said, we were seeing growth in every level of the hierarchy.

It's more of the same in terms of what TJ said. We're seeing growth in every level of the hierarchy. You know, we pushed our analysis with the teams as we, again, we were preparing to understand if we're seeing any trade down whatsoever. We aren't.

We pushed our analysis with the teams as we were again, we were preparing to understand if we're seeing any trade down whatsoever, we arent.

We saw tremendous growth in the best value of the hierarchy in the quarter in the year.

We saw tremendous growth in the best value of the hierarchy in the quarter and the year.

And we'll just continue to kind of monitor and report back on our progress as we start to see any movement in the hierarchy, but know that that's something we're paying pretty particular attention to as we move into a different environment here as we head into 2022.

And we'll just continue to kind of monitor and report back on our progress as we start to see.

Any movement in the hierarchy, but know that that's something we are paying pretty particular attention to as we move it move into a different environment here as we head into 2000 22022.

Okay.

Thank you. The next question is from Brian Morrison for TD Securities. Please go ahead. Your line is now open.

Thank you. The next question is from Brian Morrison <unk> TD Securities. Please go ahead. Your line is now open.

Yes. Good morning, I wanted to ask a question similar to what Irene was getting that but.

Yes, good morning. I want to ask a question similar to what Irene was getting at, but maybe a bit more directly here. Without infringing on your forthcoming investor day, I get asked about the benefit upon your retail results from the pandemic. I just wanted to hear, it sounds from your commentary that you're quite positive, but I just wanted to hear what your high-level view was on your ability to grow your retail results as we get into 2022, and maybe just some of the key drivers.

Maybe a bit more directly here without infringing on.

On your forthcoming Investor day, I get asked about the benefit upon your retail results from the pandemic and I just wanted to hear it sounds from your commentary.

That you are quite positive, but I just wanted to hear what your high level view on your ability to grow your retail results as we get into 2022, and maybe just some of the key drivers.

Sure I mean I.

I can't tell you how much I am looking forward to our Investor day.

I can't tell you how much I'm looking forward to our investor day.

These calls are great and we try to provide as much, you know, color on the performance of our business as we can. But we always feel a little constrained with respect to really getting deeper and demonstrating our conviction for the business.

These calls are great.

And we provide we try to provide as much color on the performance of our business as we can but we always feel a little constrained with respect to really getting deeper and demonstrating our conviction for the business. So.

I'm looking forward to sharing just how far our capabilities have evolved and the role that they play in driving our business going forward.

I'm looking forward to sharing just how far our capabilities have evolved.

And the role that they play in driving our business going forward.

It'll be our job to make sure that you clearly understand the drivers of our business performance and how our view in terms of sustainment.

It'll be our job.

To make sure that you clearly understand the drivers of our business performance.

And how.

Our view in terms of Sustainment.

And in our time together so.

and in our time together. So as I'm looking over at Gregory here, I'll continue to manage with constraint today and certainly come back to this in a few short weeks on March 10th.

As I'm looking over at Gregory Gregory here I'll continue to manage with constraint today.

And and certainly come back to this in a few short weeks on March 10th.

Okay.

Maybe I can just switch gears here to Gregory because I wanted to ask a question on financial services.

Maybe I can just switch gears here to Gregory because I wanted to ask a question on financial services. I want to know how you're thinking about as you've switched to account acquisition here. I want to know how you're thinking about the marketing spend year over year, what we should be looking at in 2022 relative to 21, and then should we expect the allowance provision to further move down into your comfort range of 11.5% to 13.5%?

I wanted to know how youre thinking about as you switch to account acquisition here I wanted to know how youre thinking about the marketing spend year over year.

Or we should be looking at in 2022 relative to 'twenty, one and then should we expect the allowance provision to further move down into your comfort range of 11, 5% to 13%.

Yeah, I'll start off and Greg may want to pile on a little bit around acquisition. But, you know, as we talked about, we're really pleased with what's been built as a result of the pandemic around digital acquisition. And I really think the team's done a great job. So as you know, the store networks are now reopened.

Yeah, I'll start off and Greg may want to pile on a little bit around acquisition, but.

As we've talked about we're really pleased with what's been built as a result of the pandemic around digital acquisition and I really think the team's done a great job. So as we see.

You know the store networks are now reopened.

You know that continues to be a great source of new account growth for us.

<unk> to be a great source of new account growth for us.

But we're really augmenting that with, as Greg said, a strong focus on the digital channel, which we didn't have before. So, you know, as we're looking forward, this is an area that we are going to, and we said this before around investing in the business, it's similar to this, this is an area we will look to invest to grow in, because it's not only good for financial services, it's frankly good for retail.

But we really augmenting that with as Greg said, a strong focus on the digital channel, which we didn't have before so.

We're looking forward. This is an area that we are going to and we said this before around investing in the business. It's similar to this this is an area, we will look to invest to grow and because it's not only good for financial services. It's frankly, good for retail as we've said before it's a way to kind of accelerate the distribution of Canadian tire money that only comes back to our family of companies. So it's certainly.

We said before, it's a way to accelerate the distribution of Canadian Tire money that only comes back to our family and company.

It's certainly a banner, sorry, a banner, a segment that's critically important to us, and we think there's great opportunity to grow as evidenced by some of the growth we've seen in the last year. As it relates to ECL, you're right, there's a few factors that are gonna be...

Our banner sorry, abandon a segment that's critically important to us and we think theres great opportunity to grow as evidenced by some of the growth we've seen in the last in the last year as it relates to ECL Youre right Theres a few factors that are going to be moving the ECL. One as we experienced this quarter, one was just growth in receivables, which which drove.

One, as we experienced this quarter, one was just growth in receivables, which drove a need to add a little bit to the allowance, but put us back in our range of 13.17%, so in that public range that we provided before. It's going to be a bit contingent, Brian , around what our growth rate is versus if there were other economic changes in the environment. That would be the only caution I'd put out there, is that were there to be a...

You need to add a little bit to the allowance, but put us back in a range of $13 one 7% so kind of in that in that public range that we provided before so.

It's going to be a bit contingent Brian around what our growth rate is versus if there were other economic changes in the environment. So that would be the only caution I would put out there is that we're there to be a significant change in unemployment rate well that might make this discussion a bit more complicated, but if the environment stays where it's at.

significant change in unemployment rate, well that might make this discussion a bit more complicated but if the environment stays to where it's at, you know,

As we continue to grow the business I think youre going to see some leverage on that rate as we move forward.

continue to grow the business, I think you're going to see some leverage on that rate as we move forward.

Thanks, Sara the only thing I would add on the on the pure or when you look at it on a customer standpoint, I mean, you talked about increased effort to diversifying our acquisition strategies and.

The only thing I would add on the pure, when you look at it on a customer standpoint, I mean, we talked about increased effort to diversifying our acquisition strategies and attracting a younger customer profile. And over half, as I said, of our new open customers were acquired through digital. And digitally acquired customers have historically been among the most engaged within our triangle ecosystem.

And attracting a younger customer profile.

And over half as I said of our new open customers were acquired through digital.

And digitally acquired customers have historically been among the most engaged within our triangle ecosystem, they spend more than customers acquired and all other channels and they are quicker to profitability in the bank.

They spend more than customers acquired in all other channels, and they're quicker to profitability in the bank.

And so, you know, when you look at overall spend per customer, increasing 20% year over year.

And so when you look at overall spend per customer.

Increasing 20% year over year.

I think strong indicators, both new and existing customers, contributed favorably to this lift.

I think strong indicators, both new and existing customers contributed favorably to this lift however.

However, what I'm really interested in is early trendings suggest that new customers that were acquired in the bank in 2021 are among our best ever, spending about 30% more than both the 2020 and 2019 cohorts. So that will be something that we...

What I'm really interested in is early trending suggest that new customers that were acquired in the bank in 2021 are among our best ever spending about 30% more than both the 2020.

In 2019 cohort, so that will something that'll be something that we were.

that we will monitor closely and you can expect to hear us talk about it.

That we will monitor closely and you can expect to hear us talk about as we move forward, Brian and just one other comment I should further clarify as youre, well aware and I know everybody is there is some seasonality with with bank receivables growth that ECL rates. So I think you've got to look at a comparable period Q4 to Q4 Q3 to Q3 I wouldn't.

Brian , and just one other comment I should further clarify, as you're well aware, and I know everybody is, there is some seasonality with bank receivables growth and ECL rates. So, you know, I think you've got to look at a confluent period, Q4 to Q4, Q3 to Q3. I wouldn't, you know, I wouldn't look necessarily Q1 to Q2 to Q3 on a sequential basis. You need to look on a quarter over quarter basis. I think that's an important data point as well to remember.

Wouldn't look necessarily Q1 to Q2 to Q3 on a sequential basis, you need to look on a on a quarter over quarter basis, I think that's an important data point as well to remember.

Understood.

Yeah.

Thank you.

The next question is from Mark Petrie from CIBC. Please go ahead. Your line is now open.

The next question is from Mark Petrie from CIBC, please go ahead, your line is now open.

Good morning, I wanted to ask about.

Good morning, I wanted to ask about your promotional rate. I know this has been a tailwind for you and no doubt helped by strong consumer demand. I'm just curious sort of your expectations in terms of how that plays out in 2022. Obviously, as you spoke about, you're dealing with a lot of inflation. So maybe you need or want to give some of that back. But there's also seems to be some sustainable changes in how you approach promotions as well. So just curious your thoughts on that topic.

Your promotional rate.

This has been a tailwind for you and no doubt helped by strong consumer demand I'm, just curious sort of your expectations in terms of how that plays out in 2022, obviously as you spoke about youre dealing with a lot of inflation. So maybe you need or want to give some of that back but theres also seems to be some sustainable changes in how you approach promotions as well.

So just curious your thoughts on that topic.

Hey, Mark it's it's T J, maybe I'll I'll chime in here on this one.

Hey Mark, it's TJ. Maybe I'll chime in here on this one. Obviously when you look at margin management, I link back to the capabilities we've been building over the last couple of years and really leveraging. When you look at how we analyze data and our elasticity models.

Obviously, when you look at margin management I link back to the capabilities. We've been building over the last couple of years and really really leveraging.

When you look at how we kind of look through or analyzed data and our elasticity models.

It's really allowing us to strike the right balance between price investment and margin efficiency on the promotional side. We've also been taking great strides in terms of emphasizing our targeted triangle rewards offers and investing there, which gets us to become a lot more efficient because you're investing at the individual level in a lot of cases and not investing in mass price decrease.

And it's really allowing us to strike the right balance between price investment and margin efficiency on the promotional side. We've also been taking great.

Strides in terms of emphasizing our targeted triangle rewards offers.

And investing there.

Which gets us to become a lot more efficient because you are investing at the individual level and a lot of cases and not <unk>.

Investing in mass price decreases and then I would also say from a capability standpoint, what's been helping us on our margin rate management is own brand penetration and we continued to see that in Q4.

And then I would also say from a capability standpoint, what's been helping us on our margin rate management is the own brand penetration. And we continue to see that in Q4. We had increased in penetration and a lot of growth in our own brands. And we always strive, as I said, to strike that balance of managing margins and creating demand. And as Greg said, we don't give an inch on being price competitive.

We.

Had increase in penetration in a lot of growth in our own brands and.

We always strive as I said to strike that balance of managing margins and creating demand and as Greg said, we we don't give an inch on being price competitive.

And the capabilities we've been building around customer data have just been huge and just strengthened these muscles as we go forward. So we're just getting better and better at this.

And the capabilities, we've been building around customer data have just been huge and just strengthen these muscles as we go forward. So we're just getting better and better at this and in an environment that we are heading into with uncertainty. The customer data also allows us to really find the right ways to provide value to our customers and expose that value to.

In an environment that we're heading into with uncertainty, the customer data also allows us to really find the right ways to provide value to our customers and expose that value to our customers. And that's what we're going to continue to do as we go forward here.

Our customers and that's what we're going to continue to do as we go forward here.

Okay. So just to just to sort of I guess bring that to a point.

OK, so so just to just to sort of I guess bring that to a point. I mean obviously own brands is a tailwind. And and and so is triangle. So is it fair to say that you know fluctuations in gross margin for 22 would be mostly driven by the competitive environment as well as any sort of leverage or D leverage on on top or natural from that trade point.

Obviously owned brands as a tailwind.

And so as triangle.

So is it fair to say that fluctuations in gross margin for 'twenty, two would be mostly driven by the competitive environment as well as any sort of leverage or deleverage on on topline.

Yeah, I think that's probably fair and I think what I would say is we use those capabilities as I described the elasticity modeling and the promotional investment and triangle to help lever that.

Yeah, I think that's probably fair. And I think what I would say is, is we use those, the capabilities that I described, the elasticity modeling and the promotional investment and triangle to help lever that up and down and engineer our margin rates.

Up and down and engineer our margin rates and the only other thing I'll say too as we look at a longer term time horizon with margin right management, we look at it over a full year basis. So it can be choppy from quarter to quarter, we saw that a little bit in 2021.

The only other thing I'll say too is we look at a longer-term time horizon with margin rate management. We look at it over a full year basis, so it can be choppy from quarter to quarter. We saw that a little bit in 2021, so there could be some choppiness quarter to quarter, but for the most part, we manage it on a yearly basis and feel good about the capabilities we have to get us through whatever choppiness there is, whether it's competitive or otherwise. Understood. Appreciate all the comments.

So there could be some choppiness quarter to quarter, but for the most part we are we manage it on a yearly basis.

And feel good about the capabilities, we have to to get us through whatever choppiness, there is whether its competitive or otherwise.

Understood I appreciate all the comments.

Thank you. The next question is from.

Vishal Shredder from National Bank Financial. Please go ahead, your line is now open.

Michelle Shredder from National Bank Financial. Please go ahead. Your line is now open.

Hi, Thanks for taking my questions.

Canadian Tire obviously making gains in e-commerce and the company has made a lot of progress in a relatively short period of time.

Can the entire obviously, making games and E Commerce and the company has made a lot of progress in a short relatively short period of time.

I was hoping you can give us color on the customer perception of your online offer at CTR, maybe versus the customer perception at the in-store, versus those in-store metrics, and relative to online, what is the trend? Is it improving, stable, or how should we proceed?

I was hoping you can give us color on the on the customer perception of your online offer at Ctr.

Maybe versus the.

Customer perception.

At the in store versus those installed metrics and relative to online what is the trend is improving stable or how should we perceive that.

Yeah, when we, thanks for the question, Michelle, we're, we're, we track all of the metrics that you're describing, whether it be customer NPS or some of the internal metrics and

Yes.

Thanks for the question so we're.

We track all of the metrics that you're describing whether it be customer NPS or some of the internal metrics.

And what we found.

And what we found since the pandemic started is we've just been getting better and better. Our NPS scores from an e-commerce fulfillment standpoint and customer experience standpoint has been improving. Our turnaround times in terms of click and collect have also been improving. And we put a lot of investment into this. When you think back into the investment required.

Since the pandemic started as we've just been getting better and better and our NPS scores from an e-commerce .

Fulfillment standpoint, and customer experience standpoint has been improving our turnaround times in terms of click and collect have also been improving and we've put a lot of investment into this when you think back.

The investment required.

to go from 5,000 orders a day to 100,000 orders a day when the pandemic first hit.

To go from 5000 orders a day to $100000.

100000 orders a day when the pandemic first hit we've invested in lockers at stores a lot of technology to help our dealers.

We've invested in lockers at stores, a lot of technology to help our dealers.

pick and pack faster, the dealers themselves have put a ton of emphasis around supporting customer service in this area because we've effectively...

<unk> Pak faster.

<unk> themselves have put a ton of emphasis around supporting customer service in this area because we are effectively.

2.5 to 3x our penetration on e-commerce since pre-pandemic. So we put a lot of effort into this area and we've been seeing it both in terms of the internal metrics we track as well as the consumer response from an MPS perspective.

Two 5% to three X our penetration on e-commerce since the since pre pandemic. So we put a lot of effort into this area and we've been seeing it both in terms of the internal metrics, we track as well as the consumer response from an NPS perspective.

Okay, and with respect to how those metrics look relative to in-store, is the in-store still the preferred experience? I understand that you're working to improve modes both, but is there a delta between those scores between in-store and online?

Okay, and with respect to how those metrics look relative to in store is the in store is still the preferred experience.

I understand that you are working to improve most both but is there a delta between those those scores between in store and online.

Yes, I think I think when you think about us, we're an omnichannel retailer and we want to be.

Yeah, I think when you think about us, we're an omni-channel retailer and we want to have a great experience no matter how consumers choose to shop us and if you look at Q4 of this year when we're open.

We want to have a great experience no matter, how consumers choose to shop us and when if you look at Q4 of this year when we're open the predominant way that.

The predominant way that consumers choose to shop us is through the stores. And our NPS scores have been improving in store as well. And it's something we take great pride in. We have to focus on kind of however a consumer wants to shop us, whether it's an in-store experience or an e-commerce experience.

Consumers choose to shop us as through the stores.

And our NPS scores have been improving in store as well and it's it's something we take great pride and we have to focus on kind of however, a consumer wants to shop us whether its an in store experience or an e-commerce experience, where we're doing our level best and you'll hear a lot more about this on investor day about how we're going to continue to invest in the customer experience.

We're doing our level best and you'll hear a lot more about this on investor day, about how we're going to continue to invest in the customer experience as we go.

As we go forward here.

Okay.

Okay, and just changing gears here, I wanted to dig a little bit more into the gross margin and then just follow along the line of thinking that you've been giving us.

Just changing gears here I want to take a little bit more into the gross margin and then just follow along the line in thinking that you've been giving us. So obviously very strong gross margin performance, but there is so much so much complications we look year over year restrictions openings search in hockey sales in certain seasonal categories.

So obviously very strong gross margin performance but there's so much complication as we look year over year, restrictions opening, surge in hockey sales in certain seasonal categories, the dealer margin sharing arrangement.

Dealer margin sharing arrangement.

know as we look forward like are there any items that were more transient in this gross margin a benefit that we can we can reflect on as we look at our forecast going forward.

As we look forward are there any items that were more transient in this gross margin benefit that.

And that we can we can reflect on as we look at our forecast going forward.

Yes.

Yeah, I think TJ said it well, to be honest, Vishal. The way that I think of this, to be honest, is I look at it, go back to 2019 and look at the longer term trends.

I think T. J said, it well to be honest vishal the way that I think it has to be honest as I look at it go back to 2019 and look at the longer term trends.

As you know, any quarter you can have some noise positive or negative, but I would just look at the general trend line we've kind of been on. And I for one am really pleased in terms of what our margin performance has been across all the businesses. CTR, Marks and Check, they've all done a great job kind of managing that margin mix.

Any quarter, you can have some noise positive or negative, but I would just look at the general trend line, we've kind of been on and and I for one I'm really pleased in terms of what our margin performance has been across all the businesses Ctr marks and check they've all done a great job kind of managing that margin mix, taking advantage of new capabilities I really.

taking advantage of new capabilities. I really, I'll echo Greg's comment, I really am looking forward to be able to chat more to investor day because I think it's going to be important to understand all the capabilities that have been built over the past few years so that you and others can understand frankly you know I think the strength that we have in this area around managing the business. So I mean I'm not going to give you a margin forecast in the 2022 if that's what you're after but what I will tell you is I am really pleased with the capabilities.

[laughter] Greg's comment I really looking forward to be able to chat more at Investor day, because I think it's going to be important to understand all the capabilities <unk> built over the past few years, so that you and others can understand frankly, I think the strength that we have in this area around around managing the business. So.

I'm not going to give you a margin forecasted into 'twenty two if that if that's what you're after but what I will tell you is I am really pleased with the capabilities of the team has built and continues to build on and I.

built and continues to build on. And I think they've proven their agility over the past two years, thinking about all the things that they had to work through around securing product, finding product to get it on our shelves. And I just really look forward to having them.

I think they've proven their agility over the past few years things, but all the things that they had to work through around securing product finding product to get it on our shelves and I just really look forward to having some more time to kind of talk about the competitive posture Canadian tire and how pleased we are with the with the assets the capabilities we have.

more time to talk about the competitive posture of Canadian Tire and how pleased we are with the assets and the capabilities we have. Michelle, that's the best way I would answer your question.

That's the best way I would answer your question.

Thank you the next.

Thank you. The next question is from Patricia Baker from Scotiabank. Please go ahead. Your line is now open.

Question is from Patricia Baker from Scotiabank. Please go ahead. Your line is now open.

Thank you, good morning everyone. Greg, in your opening remarks in your discussion of the big ramp up in sales of own brands getting to 40%, you mentioned the fact that one of the drivers there is that there's a scarcity of inventory because of supply chain disruptions. And so you're seeing brand switching. And I'm just curious whether or not you guys are looking at that as an opportunity to kind of, you know, once people switch to your brand.

Thank you and good morning, everyone Craig in your opening remarks in your discussion.

Ramp up in <unk>.

Lots of own brands getting to 40% you mentioned the fact that one of the drivers. There is that there is a scarcity of inventory because of supply chain disruption and so youre seeing brands switching and I'm, just curious whether or not you guys are looking at that as an opportunity.

Once people switch to your brand.

see that as a trial and have been permanently switched to your brand and the sentence specific that you're doing with targeted promotions to make that happen.

That is a trial and have been permanently switch to your brand incentives.

We're doing targeted promotions to make that happen.

Yes, thanks Patricia.

Yeah, absolutely I mean, we much like we just talked about different fulfillment experiences.

Yeah, absolutely. I mean, we much like, you know, we just talked about different fulfillment experiences and how we measure, you know, customer satisfaction for NPS. We do that.

How we measure customer satisfaction through App, yes, we do that we.

We do that for all of our own brands as well. And obviously more and more trial gives more opportunities to hear feedback from customers in terms of what they think about our brands. We're quite happy with the portfolio in terms of what customers, how customers are feeling about the value and more specifically something we're very focused on is the quality. So we have strong indicators in terms of how customers are feeling post purchase.

We do that for all of our own brands as well.

And obviously more and more trial gives more opportunity just to hear feedback from customers in terms of what they think about our brands, we're quite happy with the portfolio.

In terms of what customers how customers are feeling about the value.

More specifically something we're very focused on is the is the quality. So we have we have a strong indicators in terms of how customers are feeling post purchase.

about these brands. When you think about, you know, our promotional program all the way through to new programs like Triangle Select, we're really trying to lean in to provide

These brands when you think about.

Our promotional program all the way through two new programs like triangle select we're really trying to lean in to provide.

more incentive for the customer to engage with our own brands. I mean it was it's just a it's such a differentiator.

More incentive for the customer to engage with our with our own brands.

It was it's just a it's.

As such a differentiator for us.

through the pandemic, having direct relationships with vendors and manufacturers has been a great competitive advantage for us.

Through the pandemic, having direct relationships with vendors and manufacturers has been a great competitive advantage for us.

during the supply chain, you know, disruption, allowing us to secure more on-time deliveries without, you know, big bottlenecks that drove shortages for some of our national brands and for us and for other.

The supply chain.

Disruption, allowing us to secure more on time deliveries without big bottlenecks that drove shortages for some of our national brands and for us and for other for other retailers. So.

for other retailers. So, yeah, we've got very good indicators and metrics that help us understand how to incent. We're even starting to target with...

Yes, we've got very good indicators.

And metrics that help us understand.

How to how to Incent, we're even starting to target with.

With offers and our bank targeted towards owned brands.

with offers in our bank targeted towards own brands. And we feel like we've got all the data and a really, really strong product development capability.

And we feel like we've got all the data in a really really strong product development capability.

that will have our penetration continue to grow at the margin differential that we're accustomed to as we move forward.

That that will have our penetration continue to grow at the margin differential that debt.

We're accustomed to as we move forward here.

Okay, you provided a great segue for my follow up because what I was going to ask about was, you know, one of the drivers of OwnBrand is innovation. So that product development capability you're talking about and just you didn't haven't specifically mentioned it, but just curious if you can, I don't want to steal from the thunder from investor day, but you feel you have you have a good strong pipeline on innovation for 2022. And did you have some particular successes in 2021? Uh, yeah.

Okay.

Provided the great a great segue for my follow up because what I was going to ask about was one of the drivers of owned branded innovation, so that product development capability, we're talking about.

You didn't haven't specifically mentioned it but just curious if you could I don't want to steal from the Thunder from Investor day, but you.

You have a good strong pipeline on innovation for 2022 and did you have some particular successes in 2021.

Yeah.

A lot of successes.

in 2021.

In 2021.

It was it was widespread.

It was widespread. You know, I think about, I think about Helly Hansen obviously, first and foremost. Gregory talked about very, very strong performance in the brand in Canada, mostly through Sportcheck and Check, but also D2C. Our Vista by Paderno launch was a resounding success.

I think about I think about Helly Hansen obviously.

First and foremost Gregory talked about very very strong performance.

The brand in Canada.

Through sport Chek in check, but also D to C.

Our Vista by per Journal launch was was a resounding success, our type a brand in ctr around storage and organization with people cocooning and their home has grown into a.

our type A brand in CTR around storage and organization with people cocooning in their home has grown into a massive brand out of nowhere. I just recently saw new...

Massive.

A massive brand out of nowhere.

I just recently saw.

New.

new shots of store setups for the Raleigh brand. For this year, lots of extension. That was a multi-year platform of new assortment. That this year you'll see many more SKUs being introduced for Raleigh and I have a really good stat about our pipeline of new products over the course of the next three years, but I am gonna hold that.

New shots of store setups for the rally brand.

For this year lots of extension that was a.

A multi year platform of new assortment that this.

This year, you'll you'll see many more skus being introduced.

For rally and I've got a really good start about our pipeline of new products over the course of the next three years, but I am going to hold that until Investor day Patricia.

because you'll hear more, obviously. This is a real special capability for us, and I would put it at world-class level.

Because you'll you'll hear more obviously this is a this is a real special capability for us and I would put it at world class level.

Thank you.

Thank you. The next question is from Lu canon, from Canaccord genuity. Please go ahead. Know line is not open.

The next question is from Luke Hannan from Canaccord Genuity. Please go ahead. Your line is now open.

Okay, thank you very much. Thanks for squeezing me in here. I just want to add one question. On the own brands in particular, that 40% penetration is particularly impressive. I'm just curious, how does that look across your retail categories and within those categories, where you see the most opportunity for improvement and how you balance that with also maintaining good relationships with those national brands, those vendors, and also keeping a good assortment available for your customers? Thanks.

Okay. Thank you very much. Thanks for squeezing me in here I just had one question on the owned brands in particular that 40% penetration is particularly impressive I'm. Just curious how does that look across your retail categories categories and within those categories, where you see the most opportunity for improvement.

You balance that with also maintaining good relationships with those national brands those vendors and also keeping a good.

Good assortment available for your customers. Thanks.

Yes, I think we will we feel like we're deferring a lot here at Investor day, and I'm I'm, sorry for that but.

feel like we're deferring a lot here today.

Sorry for that, but it is much more forward-looking when we think about current penetration rates, future penetration rates, margin differentials, et cetera. And we will share that.

It is it is much more forward looking when we think about current penetration rates future penetration rates margin differentials et cetera.

And we will share that.

With you.

What I can say is at the aggregate level, we continue to see lots of opportunity at the consolidated CTC level to grow.

What I can say is.

At the aggregate level, we continue to see lots of opportunity at the consolidated CTC level to grow off.

our penetration. That will travel through really healthy increases through.

Our penetration.

That will travel through really healthy increases through <unk>.

CTR and sport check specifically.

Ctr and sport Chek, specifically I think you've heard us talk about Mark Smarts has an unbelievable owned brand component to their business. It's what helps make them who they are but we're really trying to attract a different clientele different customer profile.

I think you've heard us talk about Mark's. Mark's has an unbelievable own brand component to their business. It's what helps make them who they are.

But we're really trying to attract a different clientele, a different customer profile at Bart's to really kind of open up the addressable market. And we think that the right mix is settling in around 65-35 in terms of a target. And Mark's, we're seeing great progress for those national brands. So I do believe that in that particular business, the national brands are really starting to see us as a very attractive.

At parks to really kind of open up the addressable market and we think that the right mix is settling in around $65 35 in terms of a target and marks we're seeing great progress for those national brands. So I do believe that in that particular business. The national National brands are really starting to see us.

As a very attractive distribution channel that may have been been deemed closed to them in previous years, because we were virtually <unk>.

distribution channel that may have been deemed closed to them in previous years because we were virtually.

entirely own brand makeup.

<unk> owned brand makeup so.

I think big brands like Levi's and Carhartt are quite happy with the performance.

I think big brands like Levi's, and carhartt are quite happy with the performance.

of us as a partner in Canada, and we've got some really interesting...we're seeing great penetration increases of own brands in SporeCheck. And I would say that's where the more material penetration increases will be going forward. But we'll unpack all of that for you in a few weeks, Luke.

Our buses.

Our partner in Canada, and we've got some really interesting we are seeing great penetration increases of own brands in spartech.

And I would say, that's where the more material penetration increases will be going forward, but we'll unpack all of that for you in a few weeks slip.

That's great I appreciate it thank you very much.

Thank you.

We have a question from Peter Sklar from BMO capital markets. Please go ahead. Your line is now open.

We have a question from Peter Sklar from BMO Capital Markets. Please go ahead. Your line is now open.

Hi, it's Emily for Peter. So we just want a little bit more color on the supply chain. So it's the current arrangement with the charter ships and the extra storage. How is this arrangement?

Emily for Peter.

So we just wanted to a little bit more color on the supply chain. So the current arrangement with the charter a ship for any extra storage how is this arrangement.

Yes.

working out? Like is it sufficient with regards to helping you with the supply chain situation or are there more that needs to be done that you foresee that you need to do? And how exactly are inventory levels for the first half of the year, like where is that inventory now and how are things looking into the second half? Thanks.

Working out like is it sufficient to.

With regards to helping you with the supply chain situation.

Are there more that needs to be done.

That you foresee that you will need to do and how exactly our inventory levels.

The first half of the year like where is that inventory now and how are things looking into the second half.

Sure, maybe I'll, Emily, I'll try and give as much as I can here in terms of.

Sure maybe ill Emily I'll try and give as much as I can here in terms of.

Supply chain looking forward, we're getting a lot of looking forward questions today.

In terms of where we find ourselves right now I'd say the biggest issue we're dealing with is a knock on effect from the BC flooding.

It's really impacted port terminal operations and railway capacity from <unk>.

It's really impacted port terminal operations and railway capacity from B.C. inland. I'd say both rescheduled sailings and railway capacity have been catching up. In many cases it's caused delays in the range of four to six weeks.

From BC inland.

I'd say, both rescheduled sailings and railway capacity have been catching up and in many cases, it's caused delays in the range of four to six weeks.

But as we sit here today, I think we're starting to see ocean port and rail capacity now getting back into an equilibrium. At a high level to your question, we are getting the inventory we expected.

But as we sit here today I think we're starting to see ocean port and rail capacity now getting back into an equilibrium.

At a high level to your question, we are getting the inventory, we expected, but the timing of inventory receipt at our at our domestic distribution centers for some skus in some categories. Just has our planning needing to be a little more dynamic and we do expect normal planning times bye bye.

But the timing of inventory receipt at our domestic distribution centers for some SKUs and some categories just has our planning needing to be a little more dynamic. And we do expect normal planning time.

by mid-March. Looking forward, we continue to expect there to be inflated container rates throughout the balance of the year.

By mid March.

Looking forward, we continue to expect there to be inflated container rates throughout the balance of the year.

We have very good industry visibility into shipbuilding contracting. And when you look back over Q4 of 2020 and the first few months of 2021, you know, new orders for the building of container vessels reached a record high. So our expectation is that these ocean carriers will push this incremental capacity into the system early next year. So all in all, if what you're looking for is, you know, how we intend to execute...

We have very good industry visibility into shipbuilding contracting and when you look back over Q4 of 2020 in the first few months of 2021.

New orders for the building of container vessels reached a record high so our expectation is that these ocean carriers will push this incremental capacity into the system.

Early early next year. So all in all if what Youre looking for is how we intend to execute.

plan, I'd say that 2022 has us continuing to do more of the same.

And plan I would say that 2022 has us continuing to do more of the same.

to manage the business as the teams have had to do in the last two years.

To manage the business.

The teams have had to do in the last two years.

As part of our traditional operating processes, we work with those shipping companies to lock in a portion of our annual demand. And we've done this very successfully relative to the spot market for 2022.

As part of our traditional operating processes, we worked with those shipping companies to lock in a portion of our annual demand and we've done this very successfully relative to the spot market for 2022, and we're also very focused on making sure we've got sufficient capacity to move those.

And we're also very focused on making sure we've got sufficient capacity to move those goods. So we've once again chartered a dedicated ocean vessel and we've contracted it for the entire year. We plan to turn it eight or nine times throughout the year. So that's a new development for us that gives us greater control over the supply chain and limits shipping peaks which would otherwise expose us to...

<unk>.

So we once again chartered a dedicated ocean vessel.

And we have contracted it for the entire year, we plan to turn at eight or nine times throughout the year. So that's a new development for us It gives us greater control over the supply chain and limit cheap shipping peaks, which would otherwise expose us to spot market freight rates and in addition to this vessel we've already chartered.

spot market freight rates. And in addition to this vessel, we've already chartered an additional three chartered sailings in the first quarter alone. So again, all that to say, very, very focused on tactical execution. And I just love the emergence of real agility in our supply chain and the discipline.

An additional three chartered sailings in the first quarter alone so.

Again, all of that to say.

Very very focused on tactical execution.

And I just love the emergence of real agility in our supply chain and the discipline in.

in our planning and execution. It's going a long way to achieving the results we're experiencing.

In our planning and execution is going a long way to achieving the results we're experiencing.

Thank you there is no further questions registered at this time I would like to turn the meeting to Gregg for closing remarks.

Thank you. There's no further questions registered at this time. I would like to turn the meeting over to Greg for the closing remarks.

Thank you operator.

Thank you, operator. And thanks everyone again for joining us today. As we've said many times throughout the call, we really look forward to speaking with you at our Investor Day on March 10.

And thanks, everyone again for joining us today as we said many times throughout the call. We really look forward to speaking with you at our Investor Day on March 10th.

Bye for now.

Thank you.

Thank you. This will conclude today's call. You may disconnect now and we thank you for your participation.

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[music].

St.

Thank you for standing by my name is Marie 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.

If you would like to ask a question simply press.

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press star 1 on your telephone keypad. To withdraw your question, please press star 2.

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Now I will be passing along to Karen Teese, Head of Investor Relations for Canadian Tire Corporation. Karen?

Now I will be passing along to guarantees head of Investor Relations for Canadian Tire Corporation Karen.

Thank you Murray and good morning, everyone welcome to Canadian Tire Corporation fourth quarter, and 2021 year end results conference call.

With me today are Greg Hicks, President and CEO , Gregory Craig Executive Vice President and CFO and T. J flood president of Canadian tire retail.

And with that I'll turn the call over to Greg.

Thank you Karen good morning, and welcome everyone.

Before we get into the details of our Q4 and full year results, I want to start by reminding everyone that this year, Canadian Tire is celebrating its 100th birthday.

When we get into the details of our Q4 and full year results I want to start by reminding everyone that this year Canadian tire is celebrating its 100 birthday.

That's 100 years of being here to make life in Canada better, not just through the products we sell and the services we offer, but also the support our teams provide to our community.

That's 100 years of being here to make life in Canada better not.

Through the products, we sell and the services we offer but also the support our teams provide to our communities one of the ways. We do this is through jumpstart, which helps kids overcome barriers to support in play and that includes barriers created by the pandemic.

One of the ways we do this is through Jumpstart, which helps kids overcome barriers to sport and play. And that includes barriers created by the pandemic.

Since Q4 of 2020, Jumpstart has disbursed $25 million through the Sport Relief Fund to help nearly 2,300 organizations keep their doors open.

Since Q4 of 2020, jumpstart has dispersed $25 million through the sport relief fund to help nearly 2300 organizations keep their doors open.

This funding ensured that more than 220,000 kids could return to their teams and community organizations once it was saved.

This funding ensured that more than 220000 kids could return to their teams and community organizations. Once it was safe to do so at.

At the same time, Jumpstart continued to move forward with its commitment to removing accessibility barriers to sport and play.

At the same time jumpstart continued to move forward with its commitment to removing accessibility barriers to support in play.

Since we first announced our commitment to building a more inclusive Canada in 2017, Jumpstart has disbursed $23.8 million through its Inclusive Play project.

Since we first announced our commitment to building a more inclusive Canada in 2017, Jumpstart has disbursed $23 $8 million through its inclusive play project.

Last year alone Jumpstart completed the construction of three inclusive multi sport courts and five inclusive playgrounds.

Last year alone Jumpstart completed the construction of three inclusive multi-sport courts and five inclusive playgrounds.

I'm pleased to report that our charity is on track to achieve their goal of constructing at least one jumpstart playground in every province and territory by 2020.

Im pleased to report that our charity is on track to achieve their goal of constructing at least one jumpstart playground in every province and territory by 2023.

I think it's worth mentioning that through the construction of JumpStar Playgrounds in 2021, 45,000 tires were diverted from landfill.

I think it's worth mentioning that through the construction of jumpstart playgrounds in 2021, 45000 tires were diverted from landfills.

The recycled crumb rubber is used to create the playground's safe and accessible surface.

Recycled crum rubber is used to create the playground safe and accessible surfaces.

Another great example of our innovative sustainability initiatives is at MARCS, where we recently launched a pilot program to recycle our flexible plastic.

Another Great example of our innovative sustainability initiatives is that marks where we recently launched a pilot program to recycle our flexible plastics.

We're only a few months into this project and in Q4 alone, Mark's diverted two and a half tons of flexible plastics, which is equivalent to 250,000 plastic water bottles.

We're only a few months into this project and in Q4 alone marks diverted two and a half tons of flexible plastics, which is equivalent to 250000 plastic water bottles.

Just a few examples of our many sustainability initiatives, which together helped contribute to corporate Knights once again naming us among the most sustainable retailers in Canada and listing us as one of their global 100, most sustainable corporations.

This achievement is a testament to our continued efforts across our ESG practices, and I'm so proud to see our team's work recognized on a global scale.

This achievement is a testament to our continued efforts across our ESG practices and I'm. So proud to see our teams work recognized on a global scale.

But as I've said before we know that ESG is a process not a project and our work continues.

With that, let's get into our fourth quarter and full year results.

With that let's get into our fourth quarter and full year results. Our exceptional results in the fourth quarter concluded what has been a record year for CTC.

Our exceptional results in the fourth quarter concluded what has been a record year for CTC.

In the quarter, we delivered strong comp store sales growth of 11% with double digit increases across most banners.

In the quarter, we delivered strong comp store sales growth of 11%, with double-digit increases across most banners.

Revenue, excluding petroleum, was up 3% against strong comparatives and an extra week in Q4 of last year. And EPS was up 5%, reflecting strong performance in our retail segment.

Revenue, excluding petroleum was up 3% against strong comparative and an extra week in Q4 of last year and EPS was up 5%, reflecting strong performance in our retail segment.

We finished the year incredibly strong on EPS, with the quarter above $8, full year EPS jumped to a record level of nearly $19, an increase of almost 50% compared to 2020.

We finished the year incredibly strong on EPS with the quarter above $8 full year EPS jumped to a record level of nearly $19 an increase of almost 50% compared to 2020.

There is no question. This was another challenging year and I'm, so pleased with and proud of our results, but I'm certainly not surprised for a number of reasons.

There's no question this was another challenging year and I'm so pleased with and proud of our results. But I'm certainly not surprised for a number of reasons.

First after nearly two years of Covid related uncertainty and anxiety our team members continue to step up for our customers our communities and each other.

First, after nearly two years of COVID-related uncertainty and anxiety, our team members continue to step up for our customers, our communities and each other.

I'm so grateful for their hard work, their innovative ideas and their unshakable commitment to our brand purpose of being here to make life in Canada better.

So grateful for their hard work their innovative ideas and their unshakable commitment to our brand purpose of being here to make life in Canada better.

As expected Christmas automotive in hockey were the biggest drivers of our sales in Q4.

I also want to add that in the quarter, 40% of our sales across our banners were driven by our own brands.

I also want to add that in the quarter, 40% of our sales across our banners were driven by our own brand.

Across the North American retail industry, scarcity of inventory and pricing have led to a tremendous amount of brand switching by customers, and private labels have benefited from this.

Across the North American retail industry scarcity of inventory and pricing have led to a tremendous amount of brand switching by customers and private label's had benefited from this trend.

Unlike many other retailers, we were well positioned to take advantage of this trend because we've put considerable effort and energy into developing or acquiring own brands that provide both quality and value, such as Canvas, Noma, Sherwood, and Wind River, to meet our customers' needs across our banner.

Such as canvas Noma, Sherwood and wind river to meet our customers' needs across our banners.

Third, we have incredible capabilities that enable us to withstand even the most unprecedented of challenges.

Third we have incredible capabilities that enable us to withstand even the most unprecedented of challenges.

Our strength in Omnichannel capabilities made it easy for customers to shop in whatever way they chose.

Our strengthened omni-channel capabilities made it easy for customers to shop in whatever way they chose.

Even with our stores opened for in store shopping customers also turned to digital click and collect and our pickup lockers to help them fulfill their wants and needs.

Even with our stores open for in-store shopping, customers also turn to digital, Click & Collect and our pickup lockers to help them fulfill their wants and needs.

Our e-commerce sales reached half a billion dollars in the fourth quarter, a penetration rate nearly double that of pre-pandemic level.

Our E Commerce sales reached $5 billion in the fourth quarter, our penetration rate nearly double that of pre pandemic levels and as I mentioned last quarter, our strong supply chain capabilities and experienced management team.

And as I mentioned last quarter, our strong supply chain capabilities and experience management team enabled us to navigate considerable challenge.

Enabled us to navigate considerable challenges, including the flooding and mudslides we saw in November .

including the flooding and mudslides we saw in November . As a result, we remain well stocked with the products our customers wanted and needed during the holidays.

As a result, we remain well stock with the products our customers wanted and needed during the holidays.

Given the ongoing and significant supply chain challenges, we are continuing to build lead times into our supply chain processes, as we assume that from sourcing to arrival at our distribution centers, orders will take longer than in previous years.

We also ordered earlier for offshore sourcing and continue to ensure we have incremental shipping capacity by chartering our own vessels if and when required.

We also ordered earlier for offshore sourcing and continue to ensure we have incremental shipping capacity by chartering our own vessels, if and when required.

Between our team's incredible focus on execution, our rock-solid supply chain capabilities, and the strength and relevance of our multi-category assortment and our bolstered omni-channel capabilities, we were well-positioned to win in 2021, and the results speak for themselves.

At this time, I want to spend a few minutes talking about our Triangle Credit Card and our Triangle Rewards program.

At this time I want to spend a few minutes talking about our triangle credit card and our triangle rewards program.

New credit members increased 36% versus Q4 of last year.

With a more digitally focused credit card acquisition strategy, our new credit card member acquisition increased by almost 50% compared to 2020.

Since 2019, we've doubled the number of customers acquired through digital channels.

We also set a new record in the quarter when we welcomed more than 770000, new members to our triangle rewards program.

We also set a new record in the quarter when we welcomed more than 770,000 new members to our Triangle Rewards program.

For the year as a whole, we attracted 2.4 million new members to the program, 39% more than the cohort we attracted last year.

For the year as a whole we attracted $2 4 million new members to the program.

39% more than the cohort we attracted last year.

We're thrilled to be growing our membership base because, as I mentioned last quarter, members spend more. Their average basket size is higher and they shop across multiple banners and channels.

We are thrilled to be growing our membership base because as I mentioned last quarter members spend more their average basket size is higher and they shop across multiple banners and channels.

Case in point in 2021, total loyalty spend increased 11%, representing 58% of retail sales and outperforming total POS growth of 8%.

Case in point in 2021, total loyalty spend increased 11%, representing 58% of retail sales and outperforming total Pos growth of 8%.

Our Triangle Rewards members basket size continues to outpace non-member basket size with the average member basket being 30% higher than non-loyal.

Our triangle rewards members basket size continues to outpace nonmember basket size with the average member basket being 30% higher than non loyalty.

And last year more than half of our triangle rewards members shopped across multiple banners exceeding our planned target for the year.

But there's more to the story than simply growing our number of members. It's also about what type of members we are attracting.

A large portion of the 2021 cohort is made up of a younger customer demographic, a shift we're very happy to see.

A large portion of the 2021 cohort is made up of a younger customer demographic a shift we're very happy to see.

We've also seen a shift in terms of where our members are coming.

We've also seen a shift in terms of where our members are coming from <unk>.

Previously, we would acquire the majority of our new members at CTR, and many of those members would subsequently shop across our other banners.

In 2021 however, nearly half of the new members we acquired were at Sportcheck and Marks, and now those members are shopping at CTR for the first time.

It's evident that customers see real value in being part of the triangle rewards program and we're thrilled to see more and more Canadians experienced in shop across our banners and brands. Some for the first time, thanks to the power of triangle.

2021 also marked one year since we integrated party city and our triangle rewards program.

2021 also marked one year since we integrated Party City in our Triangle Rewards program.

As a reminder, part of our strategic rationale for acquiring Party Cities Canadian business in 2018 was to not only add new categories but a new customer experience.

As a reminder, part of our strategic rationale for acquiring party city's Canadian business in 2019 was to not only add new categories, but a new customer base we.

We were confident that by adding Party City to Triangle Rewards, it would further strengthen and expand the program by bolstering its appeal to Millennials and Canadian families.

We were confident that by adding party city to triangle rewards. It would further strengthen and expand the program by bolstering its appeal to millennials and Canadian families.

It turns out we were right on.

Our party city stand-alone store comparable sales were up 26% in 2021 and the party supply category within CTR stores is now a significant category with considerable room for growth.

Our party city Standalone store comparable sales were up 26% in 2021.

And the party supply category within Ctr stores is now a significant category with considerable room for growth.

Although these are excellent results in their own right, what we're even more excited to see is that Triangle is already helping drive engagement and trips to Party City.

Although these are excellent results in their own right. What we've what we're even more excited to see as the triangle is already helping drive engagement and trips to party city.

I'm going to take a few minutes to give you some additional color on this specifically because our results with Party City are a fantastic illustration of the power of our Triangle Rewards loyalty program.

I'm going to take a few minutes to give you. Some additional color on this specifically because our results with party city are a fantastic illustration of the power of our triangle rewards loyalty program.

First, there were 380,000 Triangle members who shopped at Party City last year, which represents 20% of total sales.

First there were 380000 triangle members, who shopped at party city last year, which represents 20% of total sales.

What's also interesting is that over 95% of these members also shopped at Ctr and their average sales per member at C. T. R was 65% higher than the average spend of loyalty customers, who shop only at <unk>.

In other words triangle rewards members, who shop at party city spend more at C. T R.

In other words, Triangle Rewards members who shop at Party City spend more at CTR.

Second these 380000 members over index in the $30 to 49 year old segment and are more likely to have kids.

Second, these 380,000 members over-index in the 30 to 49 year old segment and are more likely to have kids.

Third three quarters of these 380000 members have given us permission to contact them directly either by email or through our app for potential digital campaigns, which is much higher than for the typical ctr shopper.

So the party city acquisition is doing exactly what we intended as our investment thesis.

So the Party City acquisition is doing exactly what we intended as our investment thesis.

It's attracting new, highly engaged customers to the Triangle Rewards Program. It's increasing the relevance of our offering to our members, and it's driving increased sales.

It's attracting new highly engage customers to triangle rewards program, it's increasing the relevance of our offering to our members.

And it's driving increased sales at Ctr.

We continue to add more of our banners into the triangle program as we recently did with pro hockey life, just in time for the return to hockey.

We continue to add more of our banners into the triangle program as we recently did with Pro Hockey Life, just in time for the return to hockey.

Our year end E C T M balance increased significantly compared to 2020.

Our year-end ECTM balance increased significantly compared to 2020, which we believe to be a healthy indicator of future engagement with our batch.

Which we believe to be a healthy indicator of future engagement with our banners.

Before I turn it over to Gregory to review our results in more detail I wanted to provide my thoughts on our financial services business performance.

Before I turn it over to Gregory to review our results in more detail, I wanted to provide my thoughts on our Financial Services business performance.

I'm extremely pleased with the portfolio metrics the business is delivering.

From the risk levels that remain near all-time historic lows to our growth in credit card sales and active accounts in the quarter, the metrics for the business remain strong.

From the risk levels that remain near all time historic lows to our growth in credit card sales and active accounts in the quarter the metrics for the business remains strong.

And while income before tax may be down in the quarter compared to last year, the way I think about the business is by considering income excluding any changes in the ECL.

And while income before tax may be down in the quarter compared to last year. The way I think about the business is by considering income excluding any changes in the E. C L.

This provides me with a sense of how the underlying business is performing, almost on a cash basis.

And on this basis, earnings, excluding any change to the ECL, increased in the quarter by 6% while we grew our new credit card customers.

And with that I'll hand, the call over to Gregory to take you through the financial highlights of the year in the quarter.

And with that, I'll hand the call over to Gregory to take you through the financial highlights of the year and the quarter.

Thanks, Greg and good morning, everyone 2021 was an exceptional year and I will focus most of my comments on Q4 performance. However, I do want to start off with a few full year highlights.

Thanks, Greg. And good morning, everyone. 2021 was an exceptional year, and I will focus most of my comments on Q4 performance. However, I do want to start off with a few full year highlights.

Further to Greg's comments I could not be more pleased with our great finish in Q4, leading to a record setting $18.38 and diluted EPS for the year up 49% compared to 2020.

Further to Greg's comments, I could not be more pleased with our great finish in Q4, leading to a record-setting $18.38 in diluted EPS for the year, up 49% compared to 20%.

2021 marked another year of exceptional top-line growth, with comparable sales up over 8% for the year, growing off of a 10% increase from a year ago. On top of that, we achieved an outstanding 13.6% in our Retail Return on Invested Capital, one of our key areas.

2021 marked another year of exceptional top line growth with comparable sales up over 8% for the year growing off of a 10% increase from a year ago.

On top of that we achieved an outstanding 13, 6% and our retail return on invested capital.

One of our key performance metrics now before you just start to discuss the quarter I just wanted to care of a few reminders as.

Now, before I just start to discuss the quarter, I just wanted to take care of a few reminders. As you recall, 2020 had an extra week and consistent with our past practices.

As you recall 2020 had an extra week and consistent with our past practices.

we've been calculating comparable sales growth on a shifted basis.

When calculating comparable sales growth on a shifted basis for example, our sales and week 52, this year or compared to sales from in week 53 in the prior year.

For example, our sales in Week 52 this year are compared to sales from in Week 53 in the prior year.

In contrast, retail sales and revenue growth are calculated without any adjustments and do do an extra week in the comparative period in 2020, both revenue and sales growth rates are noticeably lower than comparable sales growth.

Now, let's get into the results in the quarter starting with EPS.

Our strong topline and gross margin translated into exceptional earnings growth in the quarter, we reported diluted EPS of $8.34 an increase of 5%.

And I should remind you that this result comes up on the back of an exceptional EPS growth of 47% last year.

After normalizing for $6 5 million in operational efficiency expenses normalized diluted EPS was $8 40 to two.

After normalizing for $6.5 million in operational efficiency expenses, normalized diluted EPS was $8.42, 2 cents ahead of last year.

<unk> ahead of last year.

Our retail business continued to show strong momentum in the quarter delivering $60 million in year over year IGT growth.

Our retail business continued to show strong momentum in the quarter, delivering $60 million in year-over-year IBT growth.

If we consider the key drivers of growth in our retail business I would start with sales as Greg mentioned, our consolidated comparable sales grew 11% in the quarter.

If we consider the key drivers of growth in our retail business, I would start with sales.

As Greg mentioned, our consolidated comparable sales grew 11% in the quarter.

while retail revenue, excluding petroleum, was up 3%.

While retail revenue, excluding petroleum was up 3%.

Truly fantastic results off of an exceptional Q4 a year ago.

Truly fantastic results off of an exceptional Q4, a year ago.

Our comparable sales performance was consistently strong across all of our banners. So I'd like to share some highlights for each of them starting with ctr.

Our comparable sales performance was consistently strong across all of our banners.

So I'd like to share some highlights for each of them, starting with CTR.

<unk> comp sales were up 10% in the quarter and up 23% on a two year stack basis.

CTR comp sales were up 10% in the quarter and up 23% on a two year stack basis.

On top of significant growth in 2020, 75% of categories grew this quarter, and about half of them achieved double-digit growth. A clear sign...

On top of significant growth in 2020, 75% of categories grew this quarter and about half of them achieved double digit growth.

A clear sign this was a broad based performance.

automotive, seasonal, and playing with the top divisions. When drilling into the category level, our Christmas entire categories stood out.

Automotive seasonal and playing with a top divisions and drilling into the category level, our Christmas entire categories that stood out.

As a result of our team's proactive approach to securing product combined with their strong understanding of customer needs our must win businesses in the quarter excelled with tires up 17% and Christmas categories up 21% on top of 41% a year ago.

With the return to sports another category, which saw exceptional growth was hockey at both Ctr and pro hockey life, our hockey business increased 50% and 90% respectively.

With the return to sports, another category which saw exceptional growth was hockey. At both CTR and pro hockey life, our hockey business increased 50% and 90% respectively.

A brief comment on Ctr sales and revenue pattern, which has been appointed discussion over the past few quarters falling some significant divergence in the revenue and retail sales pattern. It's ctr throughout the year on a two year stacked basis retail sales grew 23%, while two year stack revenue was up 22.

A brief comment on CTR sales and revenue pattern, which has been a point of discussion over the past few quarters.

following some significant divergence in the revenue and retail sales pattern at CTR throughout the year. On a two-year stack basis, retail sales grew 23%, while two-year stack revenue was up 22%.

<unk>.

As we have pointed out in the past over the long term the growth patterns for these two metrics tend to converge and we're observing this trend come more in line with our historical observations.

As we have pointed out in the past, over the long term, the growth patterns for these two metrics tend to converge and we're observing this trend come more in line with our historical observation.

As I move to cover sport Chek in marks I can't stress enough. How pleased we are with the performance of these two banners and how well they've fared throughout the pandemic.

As I move to cover sport check-in marks, I can't stress enough how pleased we are with the performance of these two banners and how well they fared throughout the pandemic.

at SportCheck. Comp sales increased an impressive 16%, driven by strong consumer demand, improved assortment depth in key categories, and a fully operational store network compared to a year ago.

At sport Chek.

Comp sales increased an impressive 16% driven by strong consumer demand improved assortment depth in key categories and are fully operational store network compared to a year ago.

Hockey was up an impressive 78% and categories such as athletic footwear, athletic clothing, and casual clothing all experienced double-digit growth.

Hockey was up an impressive 78% in categories, such as athletic footwear athletic clothing, and casual clothing, all experienced double digit growth.

Now, turning to Marks, building off its strongest Q4 in record, it delivered a 15% comparable sales growth in the quarter.

Now turning to marks building off its strongest Q4 and record it delivered a 15% comparable sales growth in the quarter.

With all stores fully operational in the quarter, our bricks and mortar demand saw a significant uptick. Our data and analytic capabilities allowed us to invest in the right inventory to support growth. And our decision to buy heavily in key product categories such as casual footwear, menswear and industrial wear reaped rewards.

With all stores fully operational in the quarter, our bricks and mortar demand saw a significant uptick.

Our data and analytic capabilities allowed us to invest in the right inventory to support growth.

And our decision to buy heavily in key product categories, such as casual footwear, menswear and industrial where reaped rewards.

Helly Hansen also had a strong quarter, delivering Q4 revenue growth of 28% with growth across all categories.

<unk> also had a strong quarter delivering Q4 revenue growth of 28% with growth across all categories.

The strongest contributor in the quarter was the sports wholesale division, up 28%, and representing over 62% of Helle's total business.

The strongest contributor in the quarter was the sports wholesale division up 28% and representing over 62% of <unk> total business.

Geographically, the U.S. saw the strongest uptick in demand, followed by Europe and Scandinavia, and we were very pleased with 29% growth in Canada.

Geographically the U S saw the strongest uptake in demand followed by Europe , and Scandinavia, and we were very pleased with 29% growth in Canada.

Moving down the P&L, let's look at margin.

Retail gross margin rate, excluding petroleum, increased significantly, up 204 basis points compared to prior year.

Retail gross margin rate, excluding petroleum increased significantly up 204 basis points compared to prior year.

The margin rate improvement was mainly driven by an increased rate at ctr as.

As you know key operational activities undertaken by the corporation and our dealers to drive enterprise performance in the last two years have resulted in a higher overall level of profitability.

As a result of this, we've recognized higher benefits associated with our sharing arrangements with the dealers. The bulk of these benefits are typically recorded in Q4, and this was the case again this quarter.

As a result of this we've recognized higher benefits associated with our Shang arrangements with the dealers.

The bulk of these benefits are typically recorded in Q4 and this was the case again this quarter.

Partially offsetting our margin gains were higher freight costs, as we've highlighted earlier in 2021, due to a more challenging supply chain environment. We continue to monitor and manage these freight costs across the enterprise.

Partially offsetting our margin gains were higher freight costs as we've highlighted earlier in 2021 due to a more challenging supply trade environment, we continue to monitor and manage these freight costs across the enterprise.

Impressively sport Chek and Mark's margin rates also increased and while both banners benefited from a higher mix of bricks and mortar shopping at marks margin improved primarily as a result of the data driven enhancements in our promotional activity, while sport chek saw lower promotional and clearance activity due to cleaner.

Impressively, SportCheck and Mark's margin rates also increased.

And while both banners benefited from a higher mix of bricks and mortar shopping, at Marks, margin improved primarily as a result of the data-driven enhancements in our promotional activity, while SportChek saw lower promotional and clearance activity due to cleaner, healthier inventory positions.

<unk> healthier inventory positions.

Our normalized consolidated opex ratio as percent of revenue came in at 23.3%, unfavorable by 192 basis points compared to 20.

Our normalized Opex, our normalized consolidated opex ratio as a percent of revenue came in at 23, 3% unfavorable by 192 basis points compared to 2020.

This increase in the quarter was primarily due to higher variable compensation costs, marketing, and supply chain costs.

This increase in the quarter was primarily due to higher variable compensation costs marketing and supply chain costs.

On supply chain, we continue to see a higher spend as a result of the challenging supply chain backdrop. These increases were partially offset by savings achieved under our operational efficiency program.

Last quarter, we spoke to achieving $200 million plus in annualized savings target a quarter early the.

These savings came through the implementation of more than 150 initiatives with many of them focused on improvements in e-commerce fulfillment costs and store labor productivity.

When we are thinking of the off X ratio, we believe the clearest picture of progress is to compare our annual off X rate for the retail segment going back to 2019.

When we are thinking of the Opex ratio, we believe the clearest picture of progress is to compare our annual opex rate for the retail segment going back to 2019.

This is for several reasons.

First, this comparison excludes any impacts due to the pandemic, and importantly, it accounts for the fact that operational efficiency's primary focus has been on the retail sector.

First this comparison excludes any impacts due to the pandemic and importantly, it accounts for the fact that operational efficiencies primary focus has been on the retail segment.

Finally, 2019 is the base year when our OE program launched.

Finally, 2019 is the base year, when our OA program launched.

With this, our 2021 retail segment OpEx rate has improved more than 100 basis points since 2019.

With this our 2021 retail segment Opex rate has improved more than 100 basis points since 2019.

Although we are pleased with this performance we continue to pursue further opportunities to optimize our operational leverage and improved profitability as we pursue another 100 million plus in run rate savings that we discussed last quarter.

Finally I'd.

I'd like to highlight several key impacts in our financial services business, which experienced an uptick in customer activity in the quarter, while continuing to deliver strong operational metrics.

Credit card sales were up 25% this quarter, while spend across our CTC banners increased 23% compared to 2020.

We are pleased to report a 5% increase in our average active