{ "docId": "019dd923-622c-750b-8b98-d4565c313b68", "docSlug": "207d3ac66ddd", "documentTitle": "Canadian Tire Corporation (CTC.A)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2019-12-05 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 45, "pageCount": 108, "prevPage": 44, "nextPage": 46, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 6, "notes": "Uses a 'quote-contradiction' pattern to highlight analyst oversight.", "elementsJson": [ "headline_text", "paragraph", "callout_box", "quote_block", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-d4565c313b68/45", "deckHref": "/decks/019dd923-622c-750b-8b98-d4565c313b68", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-d4565c313b68.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-d4565c313b68#slide-45", "components": [ { "bbox": null, "kind": "callout", "text": "It does not seem that the sell-side considered the positive effect Helly Hansen had on retail gross margin.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-ee3b-7248-a1a1-61a9a6655300", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "gross margin: 120bps", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd952-ee3b-7248-a1a1-68fe12c06967", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.09, "w": 0.92, "x": 0.04, "y": 0.19 }, "kind": "paragraph", "text": "It does not seem that the sell-side considered the positive effect Helly Hansen had on retail gross margin. While disappointed in CTC’s gross profit margin contraction of 120bps, it does not appear any consideration was given to the fact that without the acquisition of Helly Hansen, CTC’s margin would have been significantly worse.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a643b87a-307c-4c40-b050-687ddc639a27", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.73, "x": 0.23, "y": 0.64 }, "kind": "quote", "text": "The focal point of the Q2 results was weak Retail EBITDA. Excluding one-time costs and a tax benefit, $398MM was short of our $430 MM estimate, however this figure still includes $29MM of other non-recurring gains. SG&A was well-controlled, but GM% was down 120 bps, primarily at CTR. -50 bps was driven by a negative swing in dealer profit sharing and another ~50 bps from poor sales mix (less high-margin seasonal goods given unfavorable weather). All this to say - the quarter was weak but does not lead us to believe the Retail business is weakening. And if an increased focus on opex efficiency can delivery comparable gains to the past GM% focus (not withstanding recent noise), re-accelerated earnings growth is within reach.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "054782ea-3de0-437c-85db-8a772c7851b9", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.73, "x": 0.23, "y": 0.41 }, "kind": "quote", "text": "Underlying operating performance at Retail was down y/y. CTC did drive positive SSS across banners in Q2. EBITDA (est. ex-IFRS 16) of $400.6M rose 1.7% y/y reflecting 13.1% growth in CTFS, while Retail EBITDA fell y/y to $230M on lower Retail GM. Retail GM declined 120 bp, with CTR down 100bp, reflecting a lower true-up benefit related to margin sharing and negative shipment mix. Consolidated revenue rose 5.9% (5.4% ex-fuel) reflecting HH, strong receivables growth and the 3.3% uplift in retail sales. Retail SG&A rose 10.7% primarily due to inclusion of HH.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6d35bba8-9871-4685-87cb-5c8310a4c24d", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"Retail GM declined 120 bp, with CTR down 100bp, reflecting a lower true-up benefit related to margin sharing and negative shipment mix.\" — Patricia Baker, Scotiabank, August 8, 2018; \"GM% was down 120 bps, primarily at CTR. -50 bps was driven by a negative swing in dealer profit sharing and another ~50 bps from poor sales mix\" — Mark Petrie, CIBC, August 8, 2018", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd952-ee3b-7248-a1a1-66ad7e29aa77", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.18, "x": 0.02, "y": 0.94 }, "kind": "source-note", "text": "Source: Equity research reports", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8cf01d85-1dc8-487b-8272-b3dc8f7c3d0b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.68, "x": 0.28, "y": 0.03 }, "kind": "title", "text": "Sell-Side Did Not Address The Effect Of Helly Hansen On Gross Margin", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "edb3be20-025b-4c8f-a935-a6b01f92a203", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "eaaecc99-3d60-42e2-b2d8-65b682ee0495", "evidence": "Contrasts analyst quotes with the author's thesis to expose an oversight.", "confidence": 0.9 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }