Canadian Tire (TSE:CTC.A), the country's largest sporting goods retailer, hit a record high after unveiling a three-year growth strategy that includes additional share buybacks of C$400 million through 2015.
Shares climbed 2.8 percent to C$120.31 at 1:49 p.m. in Toronto, after touching an all-time high of C$120.53.
The Toronto-based company said in a statement today that it will target average earnings per share growth of 8-10 percent between 2015 and 2017 under an "aggressive plan to compete."
It plans to drive growth by adding 2 million square feet of new, premium retail space between 2012 and 2017.
The company said it is also aiming for annualized sales growth of 3 percent at its Canadian Tire automotive and hardware stores, 5 percent for Mark's Work Warehouse, which sell casual, and work clothing, and 9 percent at its FGL Sports unit, whose core brand Sport Chek sells sport clothes and equipment.
The company also announced it intends to return capital to shareholders through buy-back of an additional $400 million of the company’s class A non-voting shares through the end of 2015.
Canadian Tire also said it plans to invest an average of $575 million each year on business improvements between 2015 and 2017, with money going to new digital technology as well as expansions and upgrades to its store network.
“Canadian Tire and Mark's are executing a 'generational shift' in the target customer — continuing to be relevant for today's core customers, while becoming more relevant to young families with kids,” the company said in the statement.
“This will involve an evolution in product assortments, marketing, store layouts and investments in digital and online offerings.”
Under the plan, the company will also evaluate acquisitions to grow its core categories, considering companies with a strong financial outlook and brand and growth potential.
The company's sstrategy aims at attracting a younger demographic, especially families with young children.
Talking to investors today, incoming Canadian Tire CEO Michael Medline outlined said the future of both Canadian Tire and its retail units such as Mark’s Work Wearhouse and Sport Chek depends on attracting younger customers.
Customers will see this new approach in new lines of products, changes to store layout and a new approach to advertising, said Medline, who succeeds current CEO Stephen Wetmore on Dec. 1.
One early sign of the new focus is the digital expansion of Canadian Tire’s loyalty program.
There will be further digital forays over the next three years, including more online shopping, while Sport Chek plans to move most of its advertising into online forums.
Medline is describing the new approach as a “generational shift,” saying Canadian Tire will be aiming to attract new customers in the 30 to 49-year-old age bracket.
This younger focus will also be seen across Canadian Tire's other brands. Sport Chek will continue to target the 18-34 year old athlete, while Mark's will focus on 35-50 year old men.