Canada Goose loses loft

Shares slump despite earnings homerun

TORONTO • A double-digit jump in third-quarter sales and earnings didn’t prevent Canada Goose Holdings Inc. from taking a double-digit dive on the markets Thursday when the company maintained its forecast for 2018 rather than increasing it.

Chief executive Dani Reiss said Canada Goose is quite content to expand the luxury parka maker’s business methodically, he made clear Thursday, despite an overt investor desire for rapid and aggressive sales growth.

The Toronto-based manufacturer and retailer, whose fur-trimmed coats sell for as much as $1,495, is in no rush to restock shelves when some of its designs have sold out in store and online, Reiss told analysts on a conference call to discuss results for the period ended Dec. 31.

Sellouts of some of the brand’s sizes and styles have been happening with greater regularity this winter season due to colder than average temperatures in parts of North America in December and thereafter. And Canada Goose, which began opening retail stores in 2016, frequently has had customer lineups outside of its locations this year during cold snaps in Toronto, New York and Chicago.

“I think we think about this differently than many companies,” said Reiss, explaining the company’s belief that selling out of its popular outerwear is a good thing, and indicative of strong demand.

“We are not afraid to be sold out. Being sold out to me, and to our company, is a good thing, and I think it shows lots of demand for our product,” he said. “We are not a commodity product… others (have made themselves so) by ensuring that they are never out of stock, and they are also ensuring that there will come a time when people don’t want to buy their products any more.”

When asked whether the company had certain projections for deliberately keeping stock low, an industry maxim known as the scarcity principle, Reiss said the company performed no such measurements.