Canada Goose Stock Jumps As Luxury Consumer Holds
● The company pushed annual sales past the billion-dollar mark and projected more solid growth this year.
Just after Walmart and Target sent up warning flares about weakness in the discount consumer base, Canada Goose Holdings gave a kind of luxury retort — and things are still looking good higher up the price scale.
Canada Goose had a strong close to its fiscal year, posting sales of 1.1 billion Canadian dollars — breaking the billiondollar barrier for the first time — and projecting growth this year to 1.3 billion Canadian dollars to 1.4 billion Canadian dollars. Adjusted earnings per share are slated to increase from 1.09 Canadian dollars in the year just ended to a range of 1.60 Canadian dollars to 1.90 Canadian dollars.
Investors liked what they saw and sent shares of Canada Goose up 9.9 percent to $20.89 on Thursday.
Dani Reiss, chief executive officer, told WWD: “Our d-to-c business continues to deliver really strong results, driven by strong performance across our store network. Globally, we saw growth in absolutely every region with the exception of [the Asia Pacific region] as they’re experiencing some COVID-19-related impact.”
But Reiss said he expected the Chinese market, where lockdowns are severe right now, would be back by the time the company hits its peak season later in the year.
And in the U.S., he said consumers are confident, that “behaviors are normalizing” and that the company is back to prepandemic levels there.
“We are looking ahead to next year — very excited, very optimistic,” said Reiss, who has super charged the company his grandfather, Sam Tick, founded, building it into a cornerstone of the luxury outerwear market.
Reiss spent 25 years driving the company to the billion-dollar market, but now it is on track to add another billion in just a few years.
“We have the right team in place to execute on this long-term growth strategy that we have to reach the next billion of revenues,” Reiss said. “Growth to 2 billion [Canadian dollars] is going to be different than the first. To get there we have strengthened our executive teams.”
In March, veteran Carrier Baker was named president, reporting to the CEO and overseeing all aspects of the business, including operations and strategy.
Canada Goose is expanding on several fronts, with new categories such as footwear, and growing businesses such as knits and the core parka business. It is also building out newer markets, including China.
Along the way, Reiss’ role has continued to evolve as he changes to keep up with the company.
“My job is and has always been that we have the right operation in place to execute and be able to capture that growth and to really become a larger version of the brand that we already are,” he said.
Core to the company and brand is its Made in Canada approach, which Reiss said has left it in good stead as supply chain mayhem pushes prices higher.
“Our Made in Canada operations are an asset and they continue to be,” he said. “We’ve been largely immune to these headwinds” in the global supply chain.
Reiss’ plan, in essence, is very stable and focused on keeping Canada Goose a very pure brand as it grows and taking what comes in the macro environment in stride.
“We live in the times we live in and part of being a successful company is being able to navigate whatever those times happen to be,” he said.
For the fourth quarter, Canada goose logged losses of 11.4 million Canadian dollars, or 9 cents a share, on sales of 223.1 million Canadian dollars.
Adjusted earnings of 4 cents a share came in 5 cents ahead of the 1 cent loss analysts projected.
Results for the fourth quarter, which ended April 3, included an extra week compared with a year ago. Looking at just the same trading weeks year-over-year: • Total revenue increased 23.8 percent. • Direct-to-consumer revenues rose 27. 8 percent, driven by stores. E-commerce sales nudged up 1.2 percent, holding on to the explosive 123.2 percent growth seen in the same period a year earlier. • Wholesale sales increased 7.7 percent.