Question
The following is extracted from Canadian Tire's 2019 annual report: 3.1 Selected Annual Consolidated Financial Trends The following table provides selected annual consolidated financial and
The following is extracted from Canadian Tire's 2019 annual report: 3.1 Selected Annual Consolidated Financial Trends The following table provides selected annual consolidated financial and non-financial information for the last three fiscal periods. The financial information has been prepared in accordance with IFRS . ( C $ in millions, except per share amounts and number of retail locations) 2019 2018 2017 Revenue Net income # of retail locations $ 14,534.4 $ 894.8 1.746 $ 14,058.7 $ 13,276.7 $ 783.0$ 818.8 1,700 1,702 Since 2017, consolidated revenue increased every year. In its 2019 annual report, Canadian Tire explains: Total retail revenue increased primarily driven by shipment growth at Canadian Tire as well as sales growth across other Retail banners . Retail revenue was also positively impacted by the inclusion of Party City and the full- year impact of Helly Hansen . Note that Canadian Tire acquired Helly Hanson on July 3 , 2018 , and Party City on October 1 2019 . For its different retail segments or brands, the company says : Canadian Tire retail store sales increased by 4.5 % while comparable sales increased 3.8%. Growth was driven by strength in product assort- ment , particularly in Kitchen and Personal Care and Cleaning which contributors to sales growth . The inclusion of Party city also contributed to the increase in retail sales.Sport Chek retail sales increased 2.6 % and comparable sales increased 3.3% driven by expanded assortments and efficient promotional strate- gies. Footwear, Accessories and Wellness were the top performing categories. Mark's retail sales increased 2.4% and comparable sales increased 2.5%. The increases in sales was driven by increases across all channels and regions with promotions benefiting casual footwear and casual wear categories. Canadian Tire Gas+ Petroleum retail sales decreased by 5.7% attribut- able to lower per litre gas prices, lower gas volume and lower non-gas sales. Required ( a) Using only the data about sales revenue, calculate the year-on- year revenue growth.(b) Using the revenue growth % in (a) above, estimate the revenue for 2020. (c) Refer to the explanations for the revenue growth. In what ways do those explanations form an adequate basis for using past Canadian Tire data to estimate its future sales revenue? Would you expect the different segments or brands (Canadian Tire, Sport Chek Mark's, and Gas + Petroleum ) to grow differently ?
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