Canada Goose Drops With Spending Boost, Tourism Outlook
(Bloomberg) -- Parka maker Canada Goose Holdings Inc. posted earnings and revenue for the fiscal fourth quarter that beat analysts’ estimates because of strong online orders. The shares as much as 7% in New York after rising in pre-market trading.
- The company issued a new outlook, projecting sales in the current year will top C$1 billion ($823 million) for the first time. For the quarter ended March 28, revenue rose 48% from a year earlier to C$208.8 million, well above the C$164.1 million expected by analysts.
- The forecast assumes that tourism won’t return to normal this year, Chief Financial Officer Jonathan Sinclair told analysts
- The company said it’s going to step up investment, including by launching its footwear line in the fall-winter season, which won’t be profitable right away,
- The company dealt with store closures during the quarter as a new wave of infections hit Europe and North America. Its home province of Ontario was hit particularly hard. Six of its 28 locations are currently closed, half of them in Toronto. Revenue fell in Canada while it increased “significantly” in other major markets.
- Demand in mainland China, where the company now has eight stores, continued to soar. Direct-to-consumer revenue from China doubled from a year earlier, when it was hit by arrival of Covid-19.
- Six of 10 store openings planned for this fiscal year will be in China, Chief Executive Officer Dani Reiss said in an interview.
- The one miss for Canada Goose was on margins, which came in at 66.4% while analysts expected 69.2%, in part due to inventory writeoffs in wholesale. The company has been steadily increasing its direct-to-customer business, opening more stores and culling its list of partners.
- The company, which still counts on the North American winter season for most of its sales, has sought to broaden the brand’s appeal in recent years, designing collections for warmer weather. During the quarter, it announced a partnership with the National Basketball Association, starting this year in collaboration with Los Angeles-based RHUDE.
- The company reported adjusted profit of 1 Canadian cent per diluted share, beating analysts’ predictions for a loss of 11 Canadian cents.
- The shares fell 4.8% to $39.50 as of 9:55 a.m. in New York. They were up 39% this year through Wednesday’s close.
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