Canadian Tire Corporation, Limited (CTCA) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Canadian Tire Corporation's Annual Meeting of Shareholders. I would now like to hand the conference over to Maureen Sabia, Chairman of the Board. Please go ahead.

Good morning to you all. And welcome to Canadian Tire's first ever virtual Annual Meeting of Shareholders. My name is Maureen Sabia, and I'm the Chairman of the Board. Here with me today are Greg Hicks, the President and CEO of Canadian Tire; Gregory Craig, our Chief Financial Officer; Jim Christie, Executive Vice President and General Counsel; and Eleni Damianakis, our Corporate Secretary. The Board of Directors, senior management and representatives of Deloitte have also joined us remotely. For the first time in our history as a public company some 75 years, Canadian Tire has not been able to hold an in-person AGM due to the extraordinary times in which we are living. I need not tell anyone listening that COVID has disrupted all our lives. We much prefer to have an in-person annual meeting, and we have attempted to the best we can to maximize the ability of our shareholders to vote at the meeting and to participate by submitting questions. Canadian Tire is approaching its 100th birthday in 2022. And for all of that nearly 100 years, our great company has been meeting the needs of Canadians and communities. This is certainly true now more than ever. Canada needs Canadian Tire. I'm so very proud to tell you that in mid-April, we launched a $5 million Canadian Tire COVID response fund to help communities. I know that Greg Hicks will give you more details about this fund and all the other initiatives we have created to make sure as much as we can in these difficult days that we continue to meet the needs of our customers. If there is a silver lining to these challenging times, it is that it is a catalyst for out-of-the-box thinking and for coming up with different and innovative ways to operate our business. Management and our dealers have moved quickly, creatively and very impressively to make significant changes in the way we operate. They have proved, once again, how nimble and resilient Canadian Tire is. 2019, a very successful year for the tire, was also a milestone year for your Board of Directors and for the company. Stephen Wetmore advised us that he did not want to continue as CEO for the whole of 2020, and so we began our search for his successor. After a disciplined global search, which included both internal and external candidates, the Board of Directors selected Gregory Hicks as President and CEO of Canadian Tire. Greg is following a great CEO, and I want to say a few words about Stephen. It is, I think, difficult to overstate Stephen's contribution to the company. He was the key architect of the business strategy that drove our continued success and continues to do that. Stephen is a once-in-a-generation leader, and I was privileged to work with him as a member of our Board and to support him throughout his 2 terms as CEO. On behalf of the Board of Directors, I wanted to thank Stephen for his enormous contribution to Canadian Tire and for his support of Greg Hicks during the transition process. The lens through which the search committee and the Board looked as we searched for our new CEO was the strategic priorities of Canadian Tire, and the characteristics needed in the next CEO to meet them. The Board concluded that Greg Hicks was the one who best embodied those characteristics. In Greg, we have selected a world-class leader with a strategic mindset, a proven ability to build high-performing teams and to deliver results. Nowhere is this more evident than the impressive leadership he is giving to Canadian Tire during the current pandemic crisis. Greg is a great communicator, and that has stood him in good stead as the Board and management navigate their way through these challenging times. Greg is a long-time member of the Canadian Tire family, as such, he understands our business. But moving into a CEO role carries with it an enormous learning curve. Greg took on the CEO role in March, and mere days later was confronted with the challenges of running the business during the pandemic. I have to tell you that he has learned more in 2 months than many new CEOs would learn in 2 years. His exceptional leadership in the past few weeks confirms us every day in our conviction that we made the right choice. Greg's accomplishments since his appointment as CEO are impressive. His calm but very determined manner has steadied our employees and our associate dealers. He has been the guiding force in preparing our network of 1,700 retail locations to navigate through the COVID crisis. His direct communication style has united the dealers in their determination to serve our customers during this unprecedented time. He has ensured that our employees continue to be taken care of, both financially and in terms of their continued good health. And he has been the catalyst for many new and innovative ideas for serving our customers in very difficult circumstances. Greg launched our $5 million COVID response fund to help provide personal protective equipment and essential products from across our family of companies to help frontline health care and community workers respond to the crisis. And very importantly, he is running the business of Canadian Tire. Greg has shown remarkable leadership and remarkable accomplishments in a very short time and under incredible pressure. His mantra is keep calm, carry on, and we will emerge even stronger. Your Board of Directors is 100% confident in Greg's and his team's ability to skillfully and successfully lead Canadian Tire into the future. The role of your Board of Directors has also been impressive. Having spent nearly 6 months of 2019 in a search for our new CEO, we found ourselves directly, thereafter, in the COVID-19 disruption of our economy and our lives. I have always said that the role of the Board is much more than just oversight. I believe its role is to partner with and work closely with management to make decisions for today and for the future. Of course, we must challenge management, and we need to have a healthy and constructive tension between the Board and management. My view of the Board's role is shared by my colleagues and has been of enormous help to both the Board and management during this current crisis. The Board has set up a disciplined weekly information flow from management to the Board. And in addition, we have scheduled Board calls every Sunday afternoon, during which we not only get further updates, but we discuss issues that may have arisen since the last update. We have also set up a resource committee of the Board to assist management. The committee acts as a sounding board as management grapples with unprecedented issues and solutions. This makes our Board calls and our Board meetings more productive and more efficient. I'm very proud of my colleagues on the Board, as they have worked harder in 2019 and since early March than ever before. All of us have embraced the need to be available and informed. I would now like to say a few words about Pierre Boivin, who is not standing for reelection to our Board. Pierre has been one of our leading directors and we will miss his wise counsel. He did a magnificent job as Chairman of the search committee. He was always available to his colleagues and to me, when we needed his advice. He was courageous in his opinions, which he never hesitated to share, but always in the most statesman like terms. We thank him and wish him well as he takes on some new responsibilities. With the consent of the shareholders, we will welcome a new director, Michael Owens. You will find some of his accomplishments in our proxy circular. We are delighted that we will have the benefit of his experience, his skills and his leadership. Finally, I want to thank you, our shareholders, for your continued support. Canadian Tire is a great company. It is part of the fabric of our country. It is nearing its 100th birthday and for most of its life, it has gone from success to success. The values of its founders have endured. Its commitment to its communities and customers has grown stronger with each passing year. Its commitment to its employees have never been in doubt. Its relationship with its associate dealers is continually evolving to serve our customers better and to adapt to the ever-changing retail environment. It is a privilege for me to work for such a unique and admired company. Now I will pass the meeting over to our new CEO, Greg Hicks, who will address us. After Greg has spoken, we will deal with the business of the meeting, and thereafter, we will take questions. Greg?

Thank you, Maureen, and good morning, everyone. I'd like to start by thanking the CTC Board for their confidence in me, both 8 weeks ago when I was first appointed as CEO and today, following 2 months of COVID-19 turbulence. The Board's support has been unwavering, and for that, I am extremely grateful. It's been famously said, the future depends on what you do today. That's why it's nearly impossible to think about the future without considering how we are navigating our current circumstances in these uncertain, unprecedented and challenging times, not just for me as a new CEO, but for everyone across Canada and the world. Nearly every aspect of our lives has changed, how we work, how our children go to school, how we connect with our family and friends, even how we communicate with our investors. In accordance with public health guidelines on physical distancing, today, as Maureen pointed out, marks the first ever virtual AGM in our 75-year history as a publicly traded company. There's no doubt that as a nation, our resilience is currently being tested, and I am incredibly proud of how we have risen to the challenge. From our biggest cities to our smallest towns, Canadians everywhere continue to make necessary sacrifices to help slow the spread of COVID-19. The commitment of our frontline health care workers, first responders and those in essential service is proving unshakable as they continue to show up for all of us. As challenging as these times may be, they are the times that I'm most proud to be Canadian. Although I started as CEO during what are, frankly, extraordinary times, I could not be more honored to have been appointed to lead this great company. At nearly 100 years old, Canadian Tire has a rich history in our country and our culture. When faced with a tremendous challenge, a company's true values take over. Our deep-seated integrity, our will to win and our long-standing purpose of always being there for Canadians have kept us moving forward during this tempest. We have proven, time and again, that we can weather any storm. From fires and floods to recessions, and even the Great Depression, we have been there to help Canadians by providing essential products and services for life in Canada regardless of what life may look like. This is what we've always done, and plan to keep doing for another 100 years. As I embark on my journey as CEO, I've been thinking a great deal about our path to the next chapter, a place in the future that recognizes things aren't what they used to be, but has CTC emerging stronger than ever. And how will we do that? By engaging with our customers like never before, by reinvigorating our company's culture and by generating exceptional value for our shareholders. My comments this morning will be focused on 3 key phases of this path: first, how we are navigating the present; second, how we plan to return to full strength; and finally, how we are forging our future with confidence. I'll start with how we are navigating the present by managing the best we can through the COVID-19 pandemic. Since day 1, our top priority has been protecting the safety and well-being of our employees and customers. Our employees, wherever possible, have been working from home since mid-March and continue to do so today. On March 19, we chose to close all of our banners to the public, with the exception of our Canadian Tire Retail and Gas+ locations to help slow the spread of the virus. In our Canadian Tire Retail stores, we introduced heightened safety measures, including those that reinforce physical distancing to protect our employees and customers. I remain incredibly grateful to our frontline store employees who continue to serve our customers, all while dealing with their own challenges and concerns around COVID-19. They are playing such an important role in both their communities and our company, which is why we introduced a special support payment for our frontline store, distribution center and contact center employees. It certainly has not been business as usual, but our employees have not only adapted to, but embraced their current reality with positivity, patience and innovation. In addition to protecting the safety and well-being of our employees and customers, my 4 main priorities in navigating the present have been communication, e-commerce, the relationship with our dealers and protecting our brand. First, I'm committed to frequent and transparent communication with all of our stakeholders, including our employees, customers, dealers, Board of Directors and you, our investors and shareholders. Communication is always important, but at times like these, it is paramount. This crisis is fluid, with multiple decisions, many with significant ripple effects being made every single day. Our stakeholders have a right to be kept informed when it comes to what we are doing and why. Know that I'm committed to communicating frequently and transparently, not only today, but as we move into our future together. In navigating the present, we want to ensure that Canadians can still access essential products and services. One of the toughest challenges was with our Canadian Tire website. With so many customers turning to e-commerce, combined with the closure of our Ontario CTR stores to the public, our website was, in short, overwhelmed and overcapacity during the early days of this crisis. That's why my second priority has been improving our e-commerce capability and capacity. We have the best possible team who worked around the clock to find a solution, and they pulled off seemingly impossible development work. For context, prior to COVID-19, the CTR website was receiving 5,000 orders per day. Now it is successfully processing more than 80,000 orders daily. In fact, this past Saturday, we processed nearly 110,000 orders. The team overcame and solved this challenge in a matter of days, something that may have taken months or longer in our pre-pandemic way of operating. This true development work required us to reprioritize and accelerate our capital investment, and as a result, we have fundamentally improved the capability and capacity of our website. It's as if, overnight, we leapt forward into the future. Although there's no doubt, we have significant work still to do, we have officially entered our new world of e-commerce capabilities, enabling us to continue serving our customers seamlessly today and tomorrow. My third priority in navigating the present has been focusing on our collaboration and partnership with Canadian Tire associate dealers. I continue to be impressed but not surprised by their hard work, innovation and dedication to their customers. Come what may, our dealers always find a way to meet the needs of their communities, from rolling out our new curbside pickup service, offering home delivery or reserve shopping hours for more vulnerable customers and, of course, donating countless products, including vital personal protective equipment. To date, dealers have independently donated hundreds of thousands of PPE and over 25,000 liters of hand sanitizer to local hospitals, nursing homes and community organizations in need. And this brings me to my fourth priority as we navigate through the present, protecting our brand. This is a true balancing act between long-term planning and immediate action. From a long-term perspective, management of our cash and liquidity has been a critical consideration. Although we entered the COVID-19 crisis in a healthy financial position, we felt it prudent to expand the horizon of our liquidity buffer and enter into incremental credit agreements by leveraging our trusted relationships with our banking partners. We have a strong balance sheet and have fortified our capital and liquidity sources, equipping us to stand up to this challenge and continue supporting life in Canada, which includes helping Canadians in times of crisis. On April 9, we launched CTC's $5 million Canadian Tire COVID-19 response fund to help frontline health care and community workers respond to the pandemic. To date, we donated $1 million each to the Canadian Red Cross and United Way Centraide Canada and shortly, we will have dispersed $3 million in essential product from across our family of companies to frontline health care and community workers. Doing the right thing and supporting our communities when they need us most is an intrinsic part of who we are at Canadian Tire. Once this pandemic is behind us, whenever that may be, Canadians will look back and remember how corporations stepped up to help. I know that we will be proud of the footprint we are leaving behind. Although the challenges of COVID-19 are still very much a part of our reality, we are well equipped to move forward successfully. This brings me to the second phase on the path to the next chapter, our return to full strength. I will start by saying 2019 was a very successful year for Canadian Tire Corporation. Thanks to our strong second half and an exceptional fourth quarter, our highlights include phenomenal performance at CTR, the success of our Consumer Brands division and significant growth of Helly Hansen in the Canadian market, specifically at Sport Chek and Mark's. Our beloved charity, Jumpstart, had a milestone and record-breaking year. In addition to helping more than 320,000 kids in financial need access sport and recreation, they opened 4 new inclusive playgrounds, and officially reached their 2 millionth kid helped since inception. In 2019, we also saw a record-level participation in our Triangle Rewards program. Canada's first and most iconic loyalty program now boasts more than 9 million members. Our investment in data analytics capability, combined with the growth of Triangle Rewards, has allowed us to make better decisions and connect with our customers on a much more personal level, which is now more important than ever. Canadian Tire financial services, once again, delivered terrific results in 2019, and through their integration with our retail banners, continues to be critical to our customer engagement efforts and CTC's overall success. We continue to balance our financial risk in the bank with our customers' needs and expectations. Our bank has always been there to support customers facing financial difficulties. This is not new to the COVID-19 crisis. It's part of our values and another way we are there for Canadians in times of need. Whether it's by working with a customer to skip a payment interest free, reducing the interest rate for a period of time or even sharing the burden, we understand and facilitate customers' individual needs on a personal level. Today, we have many customers who are benefiting from these types of programs. As we move forward, I believe we will continue to be known as a company who does what's right for Canadians. As a company, we are resilient. We have a 97-year track record to prove it. During this crisis, we have demonstrated that adversity truly breeds innovation. We can take pride in what we have built over the last century, decade and 2 months. As I said, so much has changed as a result of COVID-19, but as we push onward, we are not mourning what used to be. We are reveling in what we are building by leaning into our well-established retail fundamentals, strong balance sheet and customers and employees' commitment to our brand. This brings me to our third phase. Out of adversity, innovation and sheer grit, we are forging our future, a better future. The strength of our brand is built upon our deep-rooted values and core purpose of supporting life in Canada, regardless of what life in Canada may look like. And these will never change. But that does not mean nothing will change. As our founder, A.J. Billes said, strive always to make things better. As our customers' wants and needs evolve, we must adapt accordingly. It's the only way to continue our purpose and stay true to our values. Change is something we've done before, are doing today and will continue to do because it will always be necessary. I have no doubt that bricks-and-mortar retail will continue to be important. COVID-19 has only reinforced that Canadians crave human interaction and experiences as well as online engagement. However, COVID-19 has also systematically changed customer-buying behaviors in ways that won't ever be undone. And these changes go well beyond e-commerce. Tomorrow's consumer behavior will be shaped by the web, social channels, mobile, e-commerce and our stores. Between what can only be described as our quantum leap into the future of e-commerce as a result of COVID-19 and our previous investment in customer data and analytics, we are ready for tomorrow. We have rich customer platforms that are the envy of the industry. Our websites receive over 600 million annual visits. We have 7.3 million unique e-mail users, over 180,000 Canadians in our on-demand customer research panel, and our mobile apps have more than 1.4 million unique users. Our CTR app has an incredible 4.7 star rating. And as I mentioned, our Triangle loyalty program boasts more than 9 million active members, 2.2 million of whom carry our credit card. Canadians trust Canadian Tire. And with our tremendous understanding of Canadians, expect us to continue using our analytics capabilities to tailor our communications and personalize our brand experience, all at the customer level. We have aligned with our associate dealers on how we will use this data in a truly One Company approach as a part of our new 5-year contract extension signed earlier this year. We are confident that these efforts will put us in a strong position to drive continuous improvements and create sustainable value. In changing our own behaviors as a company, we have found ourselves rebuilding our culture into one of innovation, transparency, and over the last 8 weeks, agility. The necessity of digital innovation during COVID-19 has helped our organization embrace many of the characteristics of organizational agility, and we need to keep them. Our operational efficiency, or OE program, is much more than a cost-reduction initiative. It is designed to change the way we work, to eliminate duplicative systems and processes across multiple banners, to decommission legacy and modernize our infrastructure, to embrace automation and mobile, including within our workplace. It's designed to fundamentally make us more agile. And the efficiencies we will derive will be an outcome of the work, not its objective. I continue to be impressed by the determination, ingenuity and teamwork of our leadership team and everyone who supports them. Together, we aren't just forging our future, we are forging our future with confidence. I am so proud of both what we've achieved and how we've achieved it. Our partnership and relationship with our associate dealers has never been stronger. And as I mentioned, we have extended our dealer contract for another 5 years. Our dealer model is something I believe in wholeheartedly. We often refer to it as our secret sauce for good reason. As active members of their communities, our dealers understand better than anyone, the unique needs of their customers. They position us to do what every retailer in the world is trying to figure out, how to think and act at a local level. They are one of the main reasons we can meet the needs of life in Canada from Victoria to St. John's and everywhere in between. Dealers have always been integral to their communities and our company, and their behaviors and actions throughout the COVID-19 crisis have only reinforced the vital role that they play. Although CTR's multi-category mix is designed to deliver in more predictable environments, it provides tremendous resilience during periods of heightened stress. This was one of our core strengths that allowed us to emerge stronger than most from the 2008 financial crisis and is once again helping us continue to succeed in the face of adversity. Now more than ever, our customers are relying on Canadian Tire for the essential products they need to equip themselves to spend more time in their homes and backyards. The demand for products across Canadian Tire's multiple categories from cleaning products and indoor projects, to kids fun and backyard living, clearly demonstrates the resiliency of our business model. But over the past 2 months, we've seen that this business model extends well beyond CTR. For example, during this crisis, Canadians have turned to Sport Chek and Mark's to purchase health and fitness products as well as health care and industrial apparel. We have the ability to meet our customers on the platform they choose, and as we move forward, have a tremendous opportunity to double down on our One Company, One Customer strategy by bringing our banners together in one digital platform. The work is already well underway. By aligning our assets and capabilities, our One Company is truly essential to life in Canada. I want to thank everyone who has contributed to our success in 2019 and over the past several weeks. Employees across our company, dealers, our valued customers, I am so incredibly fortunate to be surrounded by a supportive and highly capable management team: a team that has risen to the challenge of the last many weeks, a team that is highly energized to help forge our future. To the CTC Board, thank you for believing in me and your unwavering support. And to you, our shareholders and investors, thank you for your continued support and confidence in us, especially during these times of uncertainty and change. I'd also like to take a moment to recognize our former CEO, Stephen Wetmore. Thanks to his leadership, I assumed this role with a proven strategy in place and a strong management team to support our ambitious plans for future growth. On a personal level, I want to thank him for all of his support, advice and mentorship over the years and during my transition. Finally, I want to recognize and thank frontline health care workers, first responders and all those who continue to keep our great country moving forward in the fight against COVID-19. As a nation, we remain strong because of these true heroes. We've heard it said that these are uncertain times. We've heard it said that these are unprecedented times. We've heard it said that these are challenging times. This is all true. But today, I will tell you that for Canadian Tire, these are times of evolution, of collaboration, of innovation. I believe that change should not be feared, change should be welcome because with change comes opportunity. Rooted in our values and core purpose, which have been established and reinforced over the past 97 years, Canadian Tire's future is being built today. I'm excited for the next chapter. I hope you are, too, because it's here. Our future is now. Thank you. With that, I will now pass things back to our Chairman to address the formal business of the meeting.

Thank you, Greg. In accordance with our bylaws, as Chairman of the Board, I will act as Chairman of this meeting, and our corporate secretary, Eleni Damianakis, will act as secretary. I appoint Paul Allen and [ Jamie Bashek ] of Computershare Trust Company of Canada to act as scrutineers of the meeting. Notice calling the meeting, together with the management information circular and the formal proxy, were mailed to shareholders of record as at the close of business on March 19, 2020. An amended notice of meeting was filed on SEDAR, and a press release was issued to inform shareholders of the requirement to meet virtually. Based on the preliminary scrutineers' report, we have a quorum for this meeting. I therefore declare this meeting duly constituted for the transaction of business. I have a few guidelines for you on how the formal business of this meeting will proceed. To facilitate the introduction of motions, our Corporate Secretary, Eleni Damianakis, will move; and our CFO, Gregory Craig, will second motions where required. Our corporate secretary will now speak to some of the procedural items. Eleni?

For those registered and beneficial shareholders who have not voted in advance, voting will be available throughout the meeting until the formal items of business are concluded. Beneficial shareholders who have logged into the online platform may vote by clicking the Vote Here button, which is located on the lower right-hand corner of their screen. Registered shareholders may vote online through the investorvote.com website. The items to be voted on today are the election of directors and the appointment of the corporation's auditor. Each item of business that will be put before this meeting will be voted on by ordinary resolution, requiring a simple majority of the votes cast for approval. The Chairman will announce that voting has closed shortly after the matters to be voted on have been presented. The final voting results will be available after the meeting. Questions relating to any of the formal items of business that are being voted on today may be raised after the applicable item has been presented. After the formal business has been completed, we will open the meeting to questions from our shareholders. Questions, whether related to the formal business or other matters, may be raised through various channels. Beneficial shareholders who are logged in to the online platform may submit questions through the text box on the bottom left-hand corner of their screen. All shareholders, including registered shareholders, may also submit their questions by e-mail to [email protected]. We ask that any shareholder or proxy holder wishing to submit a question limit themselves to 1 question, and that questions be of a nature related to the business and affairs of the company as this is a shareholders' meeting. To ensure your question is received in time, we ask that you submit your questions now or before the shareholder question period begins. If there are several questions on the same topic, we will group these together. We will endeavor to respond to your questions during the meeting. However, if we are unable to get to all of them, we [Technical Difficulty]

Excuse me, this is the operator. I apologize that there will be a slight delay in today's conference. Please hold, and the conference will resume shortly. Thank you for your patience.

Operator?

Yes.

This is the other line that's still live, so they're going to move over here now.

We will -- our apologies for the technical difficulties we were experiencing. I will reread the motion for the election of directors by the common shareholders. I nominate, Eric Anderson, Martha Billes, Owen Billes, Patrick Connolly, David Court, Mark Derbyshire, John Furlong, James Goodfellow, Greg Hicks, Claude L'Heureux, Donald Murray, Michael Owens & Maureen Sabia for election as directors of the corporation by the holders of common shares to hold office until the next annual meeting of shareholders.

Are there any questions on the nominations?

We have not received any questions on this matter.

Thank you, Eleni. I declare that nominations are now closed. Holders of common shares have been provided with the opportunity to vote for each individual director nominee or to withhold their vote. If you have not yet voted, please do so now by selecting for or withhold for each individual director. [Voting]

I will now turn to the election of 3 directors by the holders of Class A nonvoting shares. I will ask Eleni to nominate the 3 directors named in the information circular to be elected by the holders of Class A nonvoting shares.

Madam Chairman, I nominate, Diana Chant, Norman Jaskolka and Cynthia Trudell for election as directors of the corporation by the holders of Class A nonvoting shares to hold office until the next Annual Meeting of Shareholders.

Are there any questions on the nominations?

We have not received any questions on this matter.

Thank you, Eleni. I declare that nominations are now closed. Holders of Class A nonvoting shares have been provided with the opportunity to vote for each individual director nominee or to withhold their vote. If you have not yet voted, please do so now by selecting for or withhold for each individual director. [Voting]

The next item of business is the appointment of the corporation's auditor. The directors of the corporation recommend the reappointment of Deloitte LLP, Chartered Professional Accountants, as the corporation's auditor for the ensuing year. I will ask Eleni to make the motion.

Madam Chairman, I move that Deloitte LLP, Chartered Professional Accountants be appointed the auditor of the corporation to hold office until the close of the next Annual Meeting of Shareholders and to authorize the Board of Directors to set the auditor's compensation.

I second the motion.

Thank you, Gregory. Have we received any questions on this motion?

We have not received any questions.

Thank you, Eleni. Holders of common shares have been provided with the opportunity to vote for the motion or to withhold their vote. If you have not yet voted, please do so now by selecting for or withhold. [Voting]

Having completed the formal items of business as set out in the notice, voting will now be closed. We will proceed to answer questions from our shareholders momentarily. If you have not yet submitted a question and wish to do so, please submit your questions now. Before we proceed to questions, I will ask Eleni to report on the voting results.

Based on the preliminary scrutineers' report, approximately 95% of the common shares and 63% of the Class A nonvoting shares were voted by proxy in advance of the meeting. Sufficient votes were cast prior to the meeting in favor of the election of each director nominee and the appointment of the auditor. Therefore, each of the nominated directors has been elected and the auditors have been reappointed. The final voting results will be available after the meeting, which we will announce by way of press release. We will also file the final voting results on SEDAR.

Thank you, Eleni. This completes the formal business for which this meeting was called. And as such, I declare the meeting terminated. I will now ask the corporate secretary if there are any questions from shareholders.

Yes, madam, Chairman. We have received some questions. The first question is as follows. The public reaction to your purchase of Party City was decidedly mixed. I do not understand the rationale. How does this company fit into the Canadian Tire Corporate philosophy? I will ask our CEO, Greg Hicks, to respond.

Thank you for your question. Let me start by giving some context. Thanks to our Triangle Rewards data, we learned that there is a tremendous overlap between customers who shop at Party City and at Canadian Tire Retail. And what's more, the customers who shopped at both spent more at -- the customers who shopped at both, spent more at CTR. That told us we had an important customer segment that we could tap into, millennials and young families, both powerful customer segments that also offer a significant opportunity to grow our Triangle Rewards program and engagement. So with every acquisition we make, we're looking for brands or businesses that not only complement our role in providing the products that prepare Canadians for the jobs and joys of life in Canada, but that also expand our product offerings and our customer base. And for us, Party City checks all the boxes there. Party City is a leading brand in an underserved, high-margin category. And through this acquisition, we immediately became the #1 party supply destination in Canada. And although the crisis has slowed some of our integration plans, over time, you'll see Party City's assortment available in Canadian Tire stores, expanding its store network to over 500 locations across Canada and on our website. As part of our -- the expanded product and brand assortments, it will also become a full member of our Triangle Reward loyalty program. And we think as Canadians emerge from the current lockdown measures, we feel quite good about the at-home party business. We expect a realignment of priorities and a new notion of togetherness, with Canadians focusing on time with close friends and family, activities and events at home, smaller gatherings and limiting large public gatherings and travel, et cetera, et cetera. So we consider all of these things to be tailwind for the Party City business, going forward.

We have another question for our CEO. Why has national sports not been integrated into the Triangle program? What is the rationale for including or not including some of the stores you own?

Thank you for your question. It's our intent to bring all of our banners into our Triangle Rewards programs. However, for some of our banners with legacy POS systems, the process takes a little bit more time, and national sports fits into this category. In 2019, we brought Sports Experts, Mark's franchisees and other Québec banners into the program. And later this year, we'll work to include Party City. One thing that I would say that has become more apparent during the crisis is that it's tough for our small banners to go it alone. The more we can attach them to the core, with Triangle Rewards being a fantastic example, the more stability and scale they will receive.

This next question is both a question and a comment commons, again for Mr. Hicks. I live within a reasonable distance of a Costco gas station. I drive by a Canadian Tire gas station on the way. And most of the time, Canadian Tire pump prices, even after the $0.05/liter discount for Mastercard holders is not competitive with Costco. I'm confused about your gasoline pricing strategy. Who is your competition when a Costco gas station is nearby?

Okay. Thank you for the question. There's a lot there. Without question, gasoline pricing is a challenging process, and who we benchmark against varies with each individual market. Typically, Petro-Can, Shell, Esso, Ultramar, Mobil would be the major benchmarks. Each of our stations identifies and prices competitively with other retail gas offers in their trade area, typically stand-alone retail stations. Costco provides a different business model and service offering than conventional gas stations, including fewer fuel grade choices, and of course, the customer needs to pay an annual membership fee before they can purchase fuel. So as you mentioned, Triangle Rewards offers our members gas discounts, in many cases, $0.05 to $0.07 depending on your credit card. And our membership is free. So in addition to gas discounts, as a Triangle credit card holder, you get other benefits: every day 4% cash back in our stores, 3% to 4% on external purchases, in addition to a number of other benefits, such as roadside assistance and no receipt returns in our stores. So overall, we view our gas pricing strategy as competitive and in keeping with the markets in which we operate, and see it as a part of a much larger value proposition for our members. But thanks for your question.

Okay. It appears that we have no further questions. So I will turn it over to our Chairman.

Thank you, Eleni. I want to thank our shareholders and guests for participating in the meeting. We did have a technical disruption. We had to change rooms, but I think it was relatively seamless. I want to thank our shareholders for their continued support, for participating in the meeting, and the meeting is now completed. I want to tell you that we are looking forward very much to seeing you in person at next year's AGM.

That concludes the meeting. The lines are now closed.