Canada Goose Drops on Slow Traffic in Reopened Stores
(Bloomberg) -- Canada Goose Holdings Inc. dropped as much as 9% after the company said activity was slow in its reopened stores, raising concerns about demand ahead of the key winter season. The company said it will focus new store openings this year on mainland China, “where the recovery of traffic remains ahead of other markets.”
- The height of the crisis hit the company during its quietest season, as parka orders tend to pick up closer to winter months. While 21 of 22 of its retail stores have reopened, traffic is “considerably lower” than a year earlier, according to the company, which predicted a “significant” revenue decline in the current quarter.
- Revenue in the first quarter, which ended June 28, was C$26.1 million ($19.7 million), down 63% from a year earlier. The company isn’t providing an outlook for 2021.
- The company has been decreasing its reliance on wholesalers and focus on its own, more lucrative stores and e-commerce. Shipments to wholesalers are “materially lower” and will generate lower revenue this year, the company said. The wholesale channel represented 74.2% of sales in the second quarter last year.
- Canada Goose has resumed production, in parallel to manufacturing Covid-19 protective equipment. Output will be about one-third of last year’s levels as the company plans a significant inventory drop by the end of the fiscal year in March.
- Canada Goose’s U.S.-listed shares were down nearly 5% as of 9:53 a.m. New York time. They had dropped 32% this year through Monday’s close.
- The stock drop makes the company a candidate to be taken private again, BTIG analyst Camilo Lyon wrote Monday.
- For the company’s statement, click here.
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