I have now listened to Canadian Tire’s conference call. My reason for selling the shares was that I have been expecting for the last year that they would get hurt by the lower dollar as they import a lot of their products. The company constantly said they had found ways to deal with that. But then when our dollar really plummeted of late I thought there is no way they can offset this. But they say that necessity had focused their minds and that they have been able to continue to offset the low dollar and that only a few items will see price increases. To date, they have maintained their margins without price increases and that is impressive. It means they managed to buy at the same average prices despite the higher dollar. This was due to switching suppliers in some cases and asking suppliers to cut the U.S. dollar price in other cases. On top of maintaining the margins they cut overhead costs.
The other reason I sold was that I had good gains on the stock but that is not a very good reason to sell. It was a mistake to sell.
Canadian Tire has been very well managed over the entire 16 years that I have had it on this site. And management seems to have gotten even better recently. These guys have been the real deal.
It probably remains a good long-term investment at the new price around $130. They did however seem to allude that Q1 might be weaker due to added spending to attract more credit card users.
I will work to update the report for this company in the next few days.