Canada Goose gets online sales boost
Winter-apparel maker reports double-digit e-commerce growth
Parka maker Canada Goose Holdings Inc. soared as much as 28 per cent, the most since 2018, after revenue and earnings for its key quarter came in well above analysts’ estimates.
E-commerce revenue surged 39 per cent, compensating for the fact that seven of its 28 stores are closed because of the pandemic. Revenue for the fiscal third quarter ended Dec. 27 rose 4.8 per cent to $474 million (U.S.), a record, beating the $413 million expected by analysts.
The quarter marks the start of cold weather in the northern hemisphere and traditionally accounts for almost half of annual sales as consumers get equipped for winter. A new wave of COVID-19 infections forced Toronto-based Canada Goose and its retail partners to close a number of stores during the holiday season in cities including Toronto and Berlin.
However, e-commerce grew by double digits in every major market, with the U.K. up almost 100 per cent, chief executive officer Dani Reiss said in a phone interview. The momentum has accelerated in the current quarter, he said — the company continued to find growth in mainland China, where it’s more than doubled the number of stores in recent months and direct sales to customers increased 42 per cent.
“There’s a ton more opportunity in China, both online and with bricks-and-mortar stores,” Reiss added.
As department stores and specialized retailers struggle, they asked Canada Goose to send shipments later than usual this year. That helped boost wholesale revenue 11 per cent in the quarter. That positive surprise is making Canada Goose stand out compared with luxury rivals, according to Deborah Aitken, an analyst at Bloomberg Intelligence.
The pandemic contributed to revenue as the company made and sold personal protective equipment. (It has now stopped production, according to Reiss.) The company also received $4.8 million of government subsidies, which helped boost gross margins.
Canada Goose posted $1.01 in adjusted earnings per diluted share, beating analysts’ calls for 86 Canadian cents. But it declined to give earnings guidance due to virus-related uncertainties.
Shares jumped 22.3 per cent to $54.95 at market’s close in New York.