Canada Goose Raises Profit Guidance After Direct Sales Double
(Bloomberg) -- Shoppers flocked to Canada Goose Holdings Inc. stores even before the weather turned cold, helping the luxury parka maker beat analysts’ earnings and revenue estimates and prompting a boost in guidance for the year.
- The company’s shift to selling clothing directly to consumers, rather than through third-party retailers, is paying off. Revenue from new stores helped direct sales more than double to C$50.4 million. Margins were also higher in the direct channel, at 75 percent, versus 56 percent overall. Wholesale sales rose 18 percent.
- The Toronto-based company, which tends to be conservative in its forecasts, boosted guidance for the full year. It now expects revenue growth of at least 30 percent this fiscal year, up from a previous target of 20 percent. Adjusted earnings-per-share growth should be about 40 percent, compared with at least 25 percent.
- Expenses surged during the fiscal second quarter, in part related to its expansion in China, where it prepared to open stores in Hong Kong and Beijing and start e-commerce operations on Alibaba’s online Tmall.
- Adjusted profit of 46 cents a share topped estimates of 26 cents. Revenue of C$230.3 million also beat estimates.
- Stock soared 11 percent to $65 in pre-market trading in New York.
- Canada Goose has jumped 95 percent this year in Toronto, the top performer on the S&P/TSX Composite Index.
- For more details on the results, click here.
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