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Investors sense a turnaround underway. CTC shares have gained almost 30 per cent in value, to a current $160, since bottoming out in April 2024.

鈥淒espite low (consumer) confidence levels, customers have been and remain more resilient than we anticipated,鈥� CEO Greg Hicks said in a May conference call with analysts to discuss CTC鈥檚 first-quarter results.

In February, Hicks was pessimistic, saying that the U.S. trade disruption could 鈥渟ubstantially erase signs of an economic rebound.鈥�

But in this year鈥檚 first quarter, spending on essentials at CTC increased by eight per cent and discretionary purchases nudged up by one per cent聽鈥� the first such gain in three years.

Hicks created a 鈥渢ariff task force鈥� to seek alternatives to merchandise sourced from the U.S., which accounts for roughly 15 per cent of the total. The task force also monitors profit margins to guard against price inflation.

There is upside potential for CTC beyond its improved performance in recent quarters. CTC operates about 1,700 stores and gas bars under several banners, including Canadian Tire, Mark鈥檚, SportChek, Sports Experts, Pro Hockey Life, Gas+ and Party City.

Revenues last year were almost eight per cent below their 2022 peak, and last year鈥檚 much-improved profits fell short of record CTC earnings of $1.1 billion in 2021.

And CTC stock is still trading at a discount of more than 20 per cent from its most recent high of $208 in 2021.

That upside doesn鈥檛 consider the growth potential of CTC鈥檚 鈥淭rue North鈥� rebuilding strategy, announced in March.

CTC will spend about $2 billion over the next four years to remodel stores and move outlets to better locations. An early example is Mark鈥檚 larger-format stores that have opened in space formerly occupied by Bed Bath & Beyond, whose Canadian operations were granted creditor protection in 2023.

The revamped Mark鈥檚, founded as a men鈥檚 workwear merchant, has expanded into children鈥檚 apparel and women鈥檚 denim garments.

CTC also plans to add thousands of new products in coming years. The emphasis will be on its private label brands, which carry the highest profit margins.

That includes this month鈥檚 CTC purchase of Hudson鈥檚 Bay-branded goods for $30 million.

For a modest price, CTC acquired a renowned HBC brand whose green, red, yellow and indigo stripes motif dates from 1779. CTC can use the motif in branding apparel and home decor goods, and as a companion to its Woods camping brand.

Experts caution that the HBC brand has limited applications. 鈥淚f (the stripes) are on tennis balls, I think there is that danger鈥� of overreach, Grant Packard, associate professor of marketing at York University, told The Canadian Press.

True North is largely about getting better results from CTC鈥檚 existing operations.

Buying decisions among CTC鈥檚 banners will be more closely integrated to eliminate duplication.

CTC鈥檚 Triangle Rewards program will see a similar consolidation, with more use of data analytics powered by artificial intelligence (AI). The goal is to offer more targeted promotional deals to Triangle鈥檚 more than 11 million members.

Triangle partnered with Petro-Canada鈥檚 rewards program in 2024 and with the Royal Bank of Canada鈥檚 Avion Rewards and WestJet Rewards this year.

Expanding membership in rewards programs builds sales volume as members on average spend about twice as much on CTC merchandise as non-members.

CTC is an unusual merchant. It is the market leader in auto supplies and repairs, hardware and sporting goods. CTC also sells home goods, gardening supplies and apparel, and operates a chain of gas bars.

That puts CTC into competition with giant foreign-owned retailers like Walmart, Home Depot, Amazon and Costco, whose parent companies are much larger than CTC.

CEO聽Hicks believes CTC isn鈥檛 making the most of the scale it has achieved in Canada and must do so to more effectively compete with global rivals.

Even as it cautiously expands, CTC has been slimming down.

CTC has cut its operating expenses. In 2024, they were at a three-year low.

This month, CTC said it will close all 17 of its underperforming Atmosphere outdoor products stores. And in February, CTC sold its Helly Hansen activewear brand for almost $1.3 billion.

In times of less economic uncertainty, the proceeds from that sale would have been spent on expansion and acquisitions. Instead, the money will remain in CTC鈥檚 treasury, apart from $200 million used to pay down debt.

Soon enough, there will be opportunities for CTC to snap up leases on more high-traffic locations as the continued slowdown in consumer spending forces retailers to close stores or go out of business altogether, the fate of Hudson鈥檚 Bay.