Q4 Earnings: Tariff Talks and Economic Uncertainty Move Markets

KP Tissue reports fourth-quarter loss compared with a profit a year earlier

KP Tissue Inc. reported a quarterly loss for the three months ended Dec. 31, reversing a year-ago profit. The company, which holds a 12.5% stake in Kruger Products Inc., reported a loss of $2 million, or $0.15 per share. This compares with a $2 million profit, or $0.20 per share, in the same quarter last year when the company had fewer shares outstanding.

Kruger Products, the manufacturer behind brands such as Cashmere, Scotties and White Swan, also reported weaker results for the quarter. Kruger recorded a loss attributable to the company of $13.7 million for the period as foreign exchange losses, higher depreciation and increased interest expenses weighed on results. That result contrasts with a $16.5 million profit in the final quarter of 2023.

Revenue for Kruger Products rose to $539.6 million in the quarter, up from $482.3 million a year earlier, driven by higher sales volumes—especially in the U.S.—and higher consumer prices in Canada. These revenue gains were not sufficient to offset the increased costs and exchange-related losses that affected net income.

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Target posts strong Q4 profits and sales, but warns of cautious spending as tariffs take hold

Target reported a solid performance in its important holiday quarter, but the retailer flagged increased uncertainty for the months ahead as new tariffs and other costs are expected to apply pressure to profits. Sales and quarterly profit slipped from last year, and Company leaders cautioned that the start of the new year will face “meaningful pressure” from tariffs on imports from Mexico, Canada and China, along with other rising expenses.

At its annual investor meeting, CEO Brian Cornell said consumers are likely to see higher prices for some fresh produce and other items as tariffs and supply-chain changes begin to affect retail prices. Target did not provide a detailed list of specific price changes for individual items, but warned that price increases on certain goods are likely.

Despite the headwinds, Target beat most quarterly estimates, though shares traded lower amid a broader market pullback. The company cited weather-related impacts on apparel sales and a decline in consumer confidence as factors that pushed February sales lower. Given rising economic uncertainty, Target now anticipates that full-year sales could be roughly flat.

Target outlined plans to invest $4 billion to $5 billion this year to expand stores, accelerate online delivery, and shorten product development cycles. These investments aim to keep the retailer responsive to trends and to reduce the risk of overstocked inventory. The company plans to add about 20 new stores this year and is targeting $15 billion in incremental sales by 2030.

Tariff actions that recently took effect have raised the risk of retaliatory measures and global trade tensions. The company said it has already reduced its reliance on China for store-brand merchandise—from about 60% in 2017 to roughly 30% today—and is targeting 25% by the end of next year, indicating a multi-year shift in sourcing toward countries such as Guatemala, Honduras and the U.S.

Target reported net income of $1.1 billion, or $2.41 per share, exceeding Wall Street expectations. Revenue of $30.91 billion also beat consensus despite the year-over-year decline. For the current fiscal year, Target expects adjusted earnings per share in a range of $8.80 to $9.80, with net sales growth of about 1% and comparable sales roughly flat.

Comparable sales during the most recent quarter rose 1.5% year-over-year. Management said it will continue to monitor consumer trends closely and remain cautious in its outlook for the year ahead.

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Linamar reports $232 million Q4 loss on impairment related to Europe

Linamar Corp., the Ontario-based auto parts and industrial equipment manufacturer, reported a significant loss for the quarter ended Dec. 31 after recording an impairment charge related to its European operations. The company posted a loss of $232.3 million, compared with earnings of $104.4 million in the same period last year.

The decline was driven primarily by a $385.5 million goodwill impairment tied to a weaker market outlook in Europe. Sales for the quarter fell to $2.38 billion from $2.45 billion a year earlier. On an adjusted basis, Linamar reported earnings of $111.8 million, down from $122.2 million a year earlier. The company manufactures automotive components as well as agricultural and industrial equipment, and it cited market and currency pressures as key contributors to the impairment.

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Aecon profits rise but fall short of expectations

Aecon Group Inc., a Canadian infrastructure and construction contractor, reported a 44% increase in quarterly profit year-over-year, but its adjusted results fell short of analysts’ expectations. Income attributable to shareholders rose to $14.0 million for the quarter ended Dec. 31, compared with $9.7 million a year earlier. Revenue increased 12% to $1.27 billion from $1.13 billion the prior year.

On an adjusted basis, diluted earnings per share rose to $0.25 from $0.12. Analysts had been expecting higher adjusted results, and the company noted that certain one-time impacts contributed to a full-year loss of $59.5 million. Management explained that part of the decline for the year related to the sale of a minority stake in Skyport, which is involved with an infrastructure overhaul at Bermuda’s airport.

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Read more stock market news:

• Earnings reports: Loblaw, Walmart and more
• Earnings reports: Cineplex, Sun Life Financial and more
• Earnings reports: Canadian banks report Q1 earnings
• Coverage of recent tariff actions and their impact on retail and trade