Strong online orders help Canada Goose Holdings Inc. beat analysts’ estimates. The parka maker issued a new outlook projecting sales in the current year will top $1 billion.
Demand rising in China, blunting impact of locked-down stores
Parka maker Canada Goose Holdings Inc. posted earnings and revenue for the fiscal fourth quarter that beat analysts’ estimates because of strong online orders. The shares fell as much as seven per cent in New York after rising in pre-market trading.
The company issued a new outlook, projecting sales in the current year will top $1 billion for the first time. For the quarter ended March 28, revenue rose 48 per cent from a year earlier to $208.8 million, well above the $164.1 million expected by analysts.
The forecast assumes that tourism won’t return to normal this year, chief financial officer Jonathan Sinclair told analysts. The company said it’s going to step up investment, including by launching its footwear line in the fall-winter season, which won’t be profitable right away,
The company dealt with store closures during the quarter as a new wave of infections hit Europe and North America. Its home province of Ontario was hit particularly hard — six of its 28 locations are currently closed, half of them in Toronto.
Revenue fell in Canada while it increased “significantly” in other major markets. Demand in mainland China, where the company now has eight stores, continued to soar. Direct-toconsumer revenue from China doubled from a year earlier, when it was hit by arrival of COVID-19.
Six of 10 store openings planned for this fiscal year will be in China, CEO Dani Reiss said in an interview.
The one miss for Canada Goose was on margins, which came in at 66.4 per cent while analysts expected 69.2 per cent, in part due to inventory writeoffs in wholesale.
The company has been steadily increasing its direct-to-customer business, opening more stores and culling its list of partners. The company, which still counts on the North American winter season for most of its sales, has sought to broaden the brand’s appeal in recent years, designing collections for warmer weather.
During the quarter, it announced a partnership with the National Basketball Association, starting this year in collaboration with Los Angeles-based RHUDE.
The shares fell 4.58 per cent to $45.99 on Thursday.