Canadian Tire Stock is in the Midst of a Large Turnaround – But Is it Still a Buy?

You won’t see Canadian Tire’s iconic triangle logo soaring on Bay Street, but its stock just hit a new 52-week high right when many retailers are sweating over consumer fatigue.

Shoppers keep showing up for everything from hockey sticks to home essentials, loyalty is holding, and that’s squeezing more value out of the company’s overall moat. I will be the first to admit, I’m surprised at the company’s success as of late.

Still, nothing is simple in the retail world at this point. Trade tensions, the exit from Helly Hansen, and aa continued slowdown in the economy present risk.

What’s Fueling Canadian Tire’s Surge?

I’ve watched Canadian Tire break through a new 52‑week high, hitting $185~ per share.

Rising Q1 sales are a big part of the story. The company posted a 4–5% bump in year-over-year revenues in the first quarter. That’s stronger than what we’ve seen from many Canadian retailers, giving Canadian Tire a bit of an edge compared to many discretionary retailers. Management stated it was from better e-commerce performance and its loyalty programs providing a bit of stickiness in terms of shoppers.

Interestingly enough, insiders are getting in as well. Reports point to increased insider buying, which is usually a strong sign of confidence. Remember, there are many reasons for insiders to sell a stock. There’s only one reason they’d buy. They think the price is going up.

I believe the market’s optimism is deserved for now, but it is important to note the stock is pushing the upper boundary of its historical valuation. If Canadian Tire can sustain these sales trends and keep winning new customers, there’s more runway. If not, history shows these rallies can cool quickly.

How Tariff Fears and Loyalty Are Lifting Canadian Tire

I’ve watched a lot of market shocks over the years, but the so-called “tariff wars” were supposed to be a real drag for retailers. Strangely enough, that’s not what happened at Canadian Tire.

When new U.S. tariffs hit, I expected consumers to shut their wallets. Who knows where prices will go, unemployment, or just the overall economy.

Shoppers have been remarkably unfazed, with spending on essentials jumping 8% and even purchases of discretionary goods rising by 1%. These are decent numbers for a retailer facing numerous supposed headwinds.

So, why are shoppers so resilient? From what I’ve seen, loyalty plays a huge role, and the rally around Canadians to “Buy Canadian”. Sure, not all Canadian Tire’s good’s are manufactured in Canada. However, it is an iconic Canadian brand.

The Triangle Rewards program has worked out very well for Canadian Tire. It’s a real motivator for repeat visits, especially with targeted offers and partners like SportChek and Mark’s. I’ve heard from friends who chase “bonus days” for more CT Money, even adjusting the timing of their purchases to maximize rewards.

This strong network of rewards, mixed with resilient shopping behavior, stands out to me as a moat against most retail shocks. As a result, even tariff pressures haven’t done much to thin out store traffic or shrink overall ticket sizes.

True North Strategy and Brand Exits

I have watched Canadian Tire make bold moves over the past few years, and it isn’t afraid to pull the trigger on an acquisition by any stretch, but few are as significant as the new True North growth strategy.

This $2 billion, four-year plan zeros in on efficiency, customer focus, and data-driven decisions. The aim is to boost earnings and long-term return on invested capital (ROIC) by cutting redundancies and integrating brands like SportChek and Mark’s under one operating model.

Then there’s the sale of Helly Hansen. Unloading the brand seems like a sharp, if slightly controversial, pivot. It made around $300M~ on the acquisition from 2018 up until now. However, integration costs over the years likely have them closer to breakeven.

Canadian Tire is now focusing capital and energy on what it knows best: retail in Canada.

The proceeds are getting funneled into debt reduction, share buybacks, and core business investments, which is ultimately what shareholders should expect.

Debt reduction lowers interest costs, freeing up capital the company can use elsewhere. Share buybacks increase EPS, which often leads to a higher share price over time.

Normally, I get skeptical when a company juggles restructuring and major asset sales in tandem. It can be a distraction or a sign of scrambling. In this case, though, both moves appear focused on tightening operations and improving long-term ROIC, which is a positive.

Is Canadian Tire Prepared for a Macro Pushback?

When I look at Canadian Tire, tariff uncertainty is always at the top of my checklist, especially with recurring U.S. threats. The recent chatter from the CEO makes it clear that any momentum in the Canadian economy has quickly been wiped out by tariff threats. That alone could spook investors in the short run.

About 15 percent of Canadian Tire’s sourcing is linked to the U.S. Some of that is hit by current tariffs, but so far it’s a slice the company calls “manageable.” Still, a surge in tariffs could quickly change the economics of a big chunk of Canadian Tire’s product assortment.

The good news? The company isn’t just sitting on its hands, it is actively hunting for alternative sourcing, which matters when margins are already thin in retail. This reminds me of how other major Canadian retailers have responded, although the scale of U.S. exposure can vary widely from one store brand to another.

Overall, the company has done quite well. It’s not going to blow your socks off with large, outsized returns. However, if you’re looking for a lower volatility play inside your portfolio and one that trades semi-cheaply, I wouldn’t blame anyone for holding it.