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(Reuters) - Canadian Tire CEO Greg Hicks said on Thursday that the retailer is preparing to mitigate potential impacts from tariffs amid a possible trade war between Canada and the United States.
The company was reviewing products and U.S. suppliers while assessing alternatives to the higher cost pressures that tariffs may have on its business and customers, Hicks added.
President Donald Trump has suspended his threat of steep tariffs on Mexico and Canada, agreeing to a 30-day pause in exchange for concessions on border and crime enforcement with the two neighboring countries.
Both Canada and Mexico have announced retaliatory tariffs on U.S. products if Trump proceeds with 25% tariffs on Mexican and most Canadian imports.
Canadian Tire sources 15% of its goods directly from the U.S., Hicks said, adding that there are some minor residual impacts from both the China and Mexico tariffs.
Toronto-listed shares of Canadian Tire, which sells hardware and furniture products, dropped 5% after the company missed fourth-quarter revenue and profit expectations, as consumer demand remained constrained in discretionary categories.
The company's quarterly revenue rose 1.5% to C$4.51 billion ($3.17 billion), missing estimates of C$4.59 billion. The adjusted profit per share came in at C$4.07, below estimates of C$4.27.
Consumer confidence in Canada had seen an uptick following interest rate cuts, Hicks said during a post-earnings call. However, he quickly noted, "I suspect the consumer confidence uptick that I mentioned earlier has now been substantially erased with tariff."
($1 = 1.4241 Canadian dollars)
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Mohammed Safi Shamsi)