Canada Goose sees direct-to-consumer plan pay off as stock jumps
Banking on e-commerce and a few flagship stores is paying off for luxury parka maker Canada Goose Holdings Inc.
The Toronto-based company on Thursday raised its earnings forecasts for the fiscal year while reporting quarterly sales that beat estimates after its direct-to-consumer strategy helped boost margins. The stock posted its biggest gain in five months.
The 60-year-old company, which went public in March, is reducing its reliance on struggling retailers that accounted for all of its sales just three years ago. It launched ecommerce sites in seven new markets and recently added Chicago and Tokyo to its Toronto and New York brick-and-mortar stores, with more openings planned in North America and Europe.
The company says it earned $37.1 million for the three months ended Sept. 30.
That’s up 85.5 per cent from $20 million in last year’s second quarter.
The profit amounted to 33 cents per share, up from 20 cents per share a year earlier when Canada Goose had fewer shares outstanding.
Revenue climbed 35 per cent to $172.3 million, from $127.9 million.
In its revised outlook, Canada Goose says it now expects annual revenue growth of at least 25 per cent compared with earlier expectations of growth in the midto-high teens.
Annual growth in adjusted net income per diluted share is also expected to grow least 35 per cent compared with earlier expectations of approximately 20 per cent, the company says.
“We see, over time, direct-toconsumer and wholesale coming more into balance,” CEO Dani Reiss told Reuters, declining to specify a time frame. “We don’t have plans to open 100s of stores. We have plans to systematically and strategically open the right stores in the right places.”
Shares have risen 85 per cent since the initial public offering as investors bet consumers will be eager to pay as much as US$1,495 for its made-in-Canada parkas. Shares jumped 13 per cent in Toronto, closing at $31.41.