Canada Goose Holdings Inc. (GOOS) on Q4 2021 Results - Earnings Call Transcript
Operator: Good day and thank you for standing by. Welcome to the Canada Goose Q4 2021 Earnings Conference Call. I would now like to hand the conference over to your speaker today, Patrick Bourke, Vice President, Investor Relations. Please go ahead. Patrick Bourke: Thank you and good morning everyone. With me are Dani Reiss, President and CEO; and Jonathan Sinclair, EVP and CFO. After prepared remarks from Dani and Jonathan, we will take your questions. This will be limited to one each to allow as many as possible to ask questions within the allotted time. Dani Reiss: Thanks, Patrick, and good morning everyone. We entered this year in uncharted territory with a simple plan in place to do everything we could to support people during this time of uncertainty and to put our business in the best possible position for a strong recovery this year and beyond. In an unprecedented and difficult year, we moved key strategic initiatives forward. And I'm very excited to share those highlights and our results with you here today. To begin, Canada Goose has shifted from recovery to growth beyond pre-pandemic levels. Not only do we finished the year with a record fourth quarter. We've positioned our business well going into next year. And now with two strong growth quarters behind us, we feel very confident about the runway ahead and a return to continued meaningful growth. Our fourth quarter showcased the true strength of our global digital business with triple-digit growth. Our global e-commerce revenue increased by 123% driven by high double-digit or low-triple-digit growth in all major established markets, including Canada, the United States, Mainland China, and the U.K. Not to mention the strong performance in our earlier stage markets like Germany, France and Ireland. This year, we accelerated our digital strategy. We accomplished in months what was planned over years. This approach was a response to a shift in consumer behavior, driven by COVID but it is underpinned but our focus on shifting forward our strategic plans in order to accelerate continued growth. This achievement has had incredible implications across our business and I look forward to continuing to update you on our achievements across this very important channel in the future. Jonathan Sinclair: Morning, everyone. Thanks for joining us. I really hope everyone is well. The fourth quarter represents a step change in our performance and an excellent finish to fiscal '21. From where we are today just 12 months ago, we were facing a near total shutdown of our business globally. We've navigated a year like no other. And we're coming out stronger on the other side. Reflecting on our results and on our path forward. There are three key things that stand out: Firstly, we have transitioned from recovery to growth beyond pre-pandemic levels. Secondly, we are purposefully investing for the long term. And thirdly, we are confident in our potential for meaningful growth in fiscal '22. So let's start with top-line. Total Q4 revenue was CAD208.8 million. Looking at the pre-pandemic comparative base, this is still 33.7% higher than 2 years ago. It is a strong reaffirmation of our strategy in a challenged environment. E-commerce led the way, driving our out-performance. Global revenue increased by 123.2% relative to last year. We have outstanding growth rates in all of our major markets. Mainland China and Canada, were both in the high-double digits. And the U.S., more than doubled. In Europe, the U.K. and Germany, both nearly tripled. Operator: Your first question comes from the line of Ike Boruchow. Your line is open. Ike Boruchow: I guess, Dani. Just a question, the e-commerce acceleration through the year, especially Q4 is pretty impressive. Can you just talk to what exactly is driving that within your business? And then maybe bigger picture. Where do you expect e-commerce penetration as a percent of direct to consumer sales potential of the federal out maybe this year or multi-year down the road? Thanks. Dani Reiss: Yes, sure. Thanks, Ike. And great question. I mean, there's a couple of factors at play here for sure. The first is obviously the massive shift in shopping behavior that is drawn on by the pandemic. In this particular quarter, mandatory retail closures were more elevated a number of markets and that affected as well. The second factor is later increase in purchasing that we saw and we've seen more immediate "buy now, wear now!" shopping in the pandemic. And winter is our season. And that make us tough, we saw the acceleration in previous quarters. And even towards the end of Q3, we saw it growing stronger which we indicated when we last spoke and Q4 just continued. And we had - to that point, we've been investing heavily into that to make sure we capture all that demand and meet our consumers wherever they want to shop with us for them. In many cases, it turned out to be online. And we were able to - and we were absolutely able to deliver on that. And I think that our investments in digital, that we made throughout pivoted quickly and decided to put a lot of - to reproduce and put a lot of additional investment into our digital platform, also will pay off. In terms of like the percentage, for us not really about reaching a certain level digital penetration. Our strategy was to drive overall DTC mix forward. However, the customer wants to shop, and that we believe that it would be naive to believe that's not going to change again over time. And what's important is to be available with consumer, wherever, whenever and however they want to shop. So for that reason, both channels are really important. Both bricks and online, and all the - while the pandemic is obviously pushed e-commerce for the fore, retail remains a very important part of the equation. And they don't - through the things what we regard virtual appointments, the lines between those two mediums are actually growing quite quickly and we're working really hard and investing a lot of money and bringing together the best of both worlds for sure. Operator: Your next question comes from the line of Jonathan Komp with Baird. Your line is open. Jonathan Komp: One maybe, follow up just clarification, thinking about that DTC margin as e-commerce penetration higher. I believe that a more profitable channel even versus retail. So does that help in terms of thinking through the margin recovery relative to the retail traffic levels, just given the higher e-com penetration. And then my broader question Jonathan, just thinking through that the margin impacts you highlighted anyway to quantify some of the investment areas, as well as some of the external pressures from factors like labor or freight. What you're expecting there in the outlook? Thank you. Jonathan Sinclair: So, thanks. So I'm going to answer those in two parts. Let's take the question around DTC and the component margins. In normal times, we enjoy similar margins from the stores and from online. But at the moment with headwinds in terms of traffic in the stores, clearly the online margin is higher. But overall, that is strength of the DTC performance is still producing a mid '40s operating margin. And that's well above the level that we see in wholesale. And therefore, you're right to extent that DTC grows faster, that will - with a margin forward and give us more scope for investment. Second, to turn to your question on freight and labor. To some extent, when this is a more of a gross margin question. And it plays into a algorithm margin. What we always talk about the tailwinds and headwinds of gross margin and the need to keep it imbalance. So for sure, like everyone else in the sector. We've seen disruptions to shipping routes and higher freight costs and that we looked at that dynamic landscape. But through our pricing power and our high gross margins, as well as the fact that we've got staged inventory and domestic production. We actually think we're pretty well positioned currently. Obviously, we watch the situation closely and we proactively plan around it. It helps the fact that our brick unit prices, our selling prices are quite high. But if there is an adverse change in a significant impacts, we would update you, but right now with pretty confident that it's imbalance. Operator: Your next question comes from the line of Michael Binetti with Credit Suisse. Your line is open. Michael Binetti: So Dani, Jonathan. I guess, just wanted to jump, but you talked a bit about the tourists that's obviously been a huge party business. You're opening a store in Southern California, so you're clearly not walking away from that focus. Can you help us think about numerically how that, their lack of tourism impacted fiscal '21. I know, Jonathan you've told us few times that has happened to your storage business prior to the pandemic. I'm just trying to think about. It sounds like you didn't account for much tourism in the guidance this year, but if I look at what I think you're telling us, you expect this year to be with wholesale flat in B2C getting to about 70%, it looks like you're maybe CAD750 million of direct to consumer, that's significantly above where you were in fiscal 2020, without even having a tourist baked into your numbers. So I'd be curious how you're thinking about how much that impacted you last year and to help us think about what the upside could be, if we do start seeing tourism come back this year? And then Jonathan, I just maybe a little bit more on the strategic rationale about the acceleration of the growth investments that you did talk about. Obviously, it's a significant opportunity as you spoke about it but why now and why so significantly. I'm curious to hear your thoughts on why the time is now? Dani Reiss: Thanks, Michael for that question about tourism. Yes, I mean your observation is a good one but we've not assumed a return of tourism in this year. And that is the return of tourism to pre-pandemic levels, whenever that will happen, which is nobody will protect that. Whenever it will happen, it definitely offers material upside to our business because it did represent such a large percentage of our sales. And they are completely incremental the was a time, and we believe that will be again at some point in the future. But with regards to this year. And of course, we're optimistic, that will happen at some point in the future. This year, and we look at the year to come. We're not planning on tourism returning in fiscal '22. And so that's as we look at it and I find it really encouraging that we can grow through these times, in the absence of global tourism and so grow at the rate that we're growing, and I'm very excited about the return of global tourism to just add to that, on that Jonathan Sinclair: I think there is - for me tourism is called spring waiting to go. As and when it returns, that really will bring us back. I think, when it comes to the investment rationale, we're seeing great demand strength globally. And from the investments we've already made, and as we've reported back to you, we've seen the payback. And in the fall-winter period this year in states. The digital shift in particular has pulled forward years of digital growth and consumer expectations may experience a way higher. So we need to stay in front of that, and so investing into that. Right now we see as pivotal. Operator: Your next question comes from the line of Oliver Chen with Cowen. Your line is open. Oliver Chen: You've made a nice strides in the multi-seasonal product. Where do you see that mix going over time? And how will impact the seasonality your experience. Also we're looking for the footwear, we just love your views on how that mix could evolve and what the strategy will be by channel? Thank you. Dani Reiss: Thanks. Oliver. Yes, we just performed really well, right now Oliver. We're very, very happy with how it's doing. And it's a super important part of our collection going forward. And our plans are going forward. Other profit and sectors in particular are lightweight down styles for spring, that are completely recycled materials and we're really happy to see how well those are doing. I think, spring is a very important part of our future plans. I think the lifestyle brand it's going to be an important component and I want to continue to grow at a meaningful rate. And so, we're very excited about that. In terms of footwear, I'm personally extremely excited about footwear. It's something that we put a lot of thought into over many years and is - has had a lot - a lot of strategic thinking put behind it. And it's finally coming to fruition this fall, very excited about it. I think that, I think the market will allow-- will like our interpretation on footwear as well. And the products that are going to market and we're going to start with a small and which are - invest to that and grow our part are proven there and we do believe that over a long period of time. Long-haul, longer term, it should be a very material piece of business for this company. For this year, I wouldn't consider it to be material cause of business. Operator: Your next question comes from the line of Megan Annette with TD Securities. Your line is open. Megan Annette: Can you talk a little bit more about your learnings with regards to brand awareness? What's your view on brand affinity today relative to pre-pandemic? I'm just looking at North America specifically, have you seen any shift in consumer sentiment toward the brand in Canada and also in the U.S.? Thank you. Dani Reiss: Yes, thanks for the question. And we're definitely seeing, growing a part of the shift in brand sentiment and in trust for our brand. This quarter, we continue to focus on driving meaningful change in this fundamental to that is consumer and that has been delivering results. And we believe that this result for a number of factors including important progress we've made under our human nature platform which been very well received and is a very important part of the future. In our commitment to keeping the planet cold and the people on it warm, that's a sincere commitment. We released 2020 sustainability report this year second in a row and reaffirms our commitment to net zero emissions by 2025, and add to new commitments run foot fibers for materials and sustainable packaging. So we've been continuing to execute against our communities address environmental social and economic challenges and we're extremely proud of the progress we've made so far. And I'll add like, I think it's - one last thing and that's I think that, if it - with roll out to pandemic further, pandemic was anything to line is that is a delicate balance of human and nature, and I really don't think that if you look forward 20 years, are there many companies, if we meet many companies around that are not good for the world. And so it is our intention to be a leader in helping to transform the apparel industry to be sustainable. Operator: Your next question comes from the line of Omar Saad with Evercore. Your line is open. Omar Saad: Thanks for taking my question, and all the information and the update. Appreciate it. It's great to hear the success of the DTC and e-commerce. I'd love to ask a follow-up and more detail around the wholesale side of the business. I know it's planned to be flat, maybe any more details around plans to rationalize or not going forward and then also on the kind of wholesale.com side. How do you look at that marketplace? And is there a role for the e-concession type models that our marketplaces that are out there. Thanks. Dani Reiss: Yes, thank you for your question. And wholesale first, we've always taken very controlled brand first approach to wholesale. And this includes letting down differentiated distribution of deeper with the best and we do believe we have some strong and wholesale partners. And wholesale is an important part of our business, always uncertain. And it continues to be even though our DTC business is growing faster, it's not diminishment of the importance of wholesale. But that said, we do add it and make sure that all of our accounts are brand accretive and helpful to building our brand. So for example, in fiscal '21, we went from 2100 points of distribution down to 1900. Just over 1900 and reversal publicly were 2500. So we have been rationalizing all the time, and that's to make sure that we are continuing to part of the like-minded partners. It's a continuous process. And honestly, it's not just in the last few years. So after and plus 15 years and we continue - we expect it will always be a part of how we strategically think about our business and just that said to reiterate in a wholesale as a category remains an important strategic part of our business. And we're really excited to get going what's coming here with the best-in-class platforms that we do have. So some, that's also. In terms of - in terms of new way to do business on e-commerce and with third parties, e-concessions are no whatnot, certainly very much top of mind and we're always exploring new malls, and new ways of integrating with our partners. And are involved in conversations all the time. Our focus is on staying in front of how consumer should shopping is evolving. I mean, should we provide the best possible experience for our consumers and we're certainly evaluating how this sort of model can do that. We don't have any concrete plans at this time, but we continue to 'think, talk' and we watch all the space is evolving. Operator: Your next question comes from the line of Sam Poser with Williams Trading. Your line is open. Sam Poser: Thank you for taking my question. I wonder if you can dig into your marketing. You're going to increase your marketing spend. I assume a lot of that's going to be digital and direct. And generally when companies have been. So what kind of return on investment are you putting this year upon, that increased digital owned marketing right now, because a lot of company get a good return fairly quickly when they start to correct that out? Jonathan Sinclair: Yes, I think. Thanks, Sam. I think that our - you're right to say that a lot of our investment is digital. I think in this world, it's inevitable. And we have seen and continue to see and hence continues to feel our growth by that investment. We're always exceptional. And so from that point of view, it gives you increased conviction over time, and that's where we put a lot of our emphasis is to drive the performance of the business. Operator: Your next question comes from the line of Camilo Lyon with BTIG. Your line is open. Camilo Lyon: Just two quick questions. One just on the wholesale guide. I was wondering, Jonathan. If you could help us articulate in the components of what is the contribution from fewer doors versus what the order book was within that flat guide? And then just longer term on footwear. I'm assuming that's going to be mentioned to your DTC channel first. How should we think about the price points of the offering and who are your key competitors that you would point to as one thing you would go after from a market share perspective because you straddle both the technical, as well as the fashion components of the market. So there is a lot of opportunity there it seems. Jonathan Sinclair: So I think, when it comes to the wholesale business. We have been successful over the years at calling the distribution while with where it ceases to be brand accretive. We've always been very clear. The wholesale distribution serves a purpose in this business we choose to be. Brand accretive idea because it gives a physical presence of the business in places where we're not going to go directly ourselves. All because it puts us with key opinion leaders mobile. And inevitably, all the time, some distribution falls away. Some distribution comes on stream this interesting and what we need to be. But overall, we see a gradual decline, and with sort of somewhat just over 1900 doors these days and time of IPO, we were around the 2500 or so. So you can see a gradual decline going on in the number of doors. We see that as something that will likely continue, and that will produce as I said before, ever better quality of earnings in absolutely the right quality of distribution for the brand. I think it's early days on footwear to be talking about. It will be talking about it much closer to the launch. But we're super excited about that. We see real scope for it in this business. But we're also very clear that it's going to be a launch of where the focus is on seizing and demand generation rather than it being a meaningful business this year. It's a meaningful launch of the business will become meaningful over time. Dani Reiss: Yes. Great. I'll just add that. I mean, I'm very excited about products themselves. I think I know the Canada Goose is known for best-in-class products and is our intention to only ever best-in-class products into the marketplace. And you can expect no loss from our footwear offering when it hits the marketplace. Operator: Your next question comes from the line of Jay Sole with UBS. Your line is open. Jay Sole: The past couple of calls, not last year. But in the 4Q calls in 2018 and 2019. You gave kind of a 3-year view, and that included operating margin guidance. In 2018, you talked about a 26% EBITDA margin by 2021. In the '19 call, you talked about similar type of target. Just given in light of the growth of the EBIT margin guidance that you gave today. Can you update us on your 3-year outlook. And when do you think you can get back to that 26% EBITDA margin that you talked about or EBIT margin. I'm just it gives lot of clarity on like what you kind of, how do you see the margin trending in fiscal '23 and fiscal '24? Jonathan Sinclair: So thanks, Jay. And as you are aware, we're not giving that medium-term guidance at the moment. But what I would say is that we already see fiscal '22 as the beginning of the margin recovery. The big needle mover. As Dani said before, as high growth right now. The big needle mover is chosen because that's something that changes the game when it comes to the retail stores. And that will fundamentally drive sales density in the stores and sales density when you're dealing with a fundamentally fixed cost base. Ultimately drives profitability of the stores, that will be the one thing. And because what comes with tourism, full recovery of retail traffic. And so, there is a reason why we're not giving medium-term guidance moment, which is - it's just that we don't know wouldn't that. We'll resume, but for sure when it resumes. We're going to be that, and that will propel us back, both to where we were and ultimately to where we want to be. Operator: Your next question comes from the line of Robby Ohmes with Bank of America. Your line is open. Robby Ohmes: My question is just when you look at the exceeding CAD1 billion or revenue guidance this year, which excludes return of tourism. What is - how should we think about sort of the assumption for U.S. and Canada versus international and China? And maybe I'll be curious how do you think about the 2-year growth rates for the U.S. and Canada for this year. So versus in fiscal '20 or calendar 2019? How should we be thinking about that? Jonathan Sinclair: Yes, it's I think the first thing to think about. When you're looking at that growth rate is the exceeding CAD1 billion is not coming off CAD903 million as an outcome because that included PTA and that's not something we see as a competitive going forward. So the first thing you have to do is the background. And then the second thing I would say is that we need to look at what's been happening in Q4 because I think that gives you an idea of the underlying brand strength in the direction of travel of the business. So we are optimistic for how we see all of our territories developing. Canada's somewhat more established, but to be honest we see ample scope there. And for sure in North America in the U.S., sorry and Europe. You've seen, we are way up, I mean we already and we believe that, that's something it's going huge amount of momentum. And that builds up to crescendo at the end of last year, we still and we had eight, nine stores in Mainland China, which relative to both the potential and the sort of penetration you see in other brands is very early in the journey. So we see a lot of scope for growth in all of our markets. Probably led by Asia, but with real opportunity in Europe and continuing growth potential here in North America. Operator: Your next question comes from the line of Adrienne Yih. Your line is open. Adrienne Yih: Congratulations on the progress. I guess my question is actually on the supply chain. There's not as much of a focus for you because you do so much of it domestically. So I guess, are you seeing any raw material input costs? And then I guess moving forward, others for fall-winter season. Other competitors, they very likely need to be raising prices. So how do you think about the pricing environment as you go into fall-winter? if others do you take inflationary pricing up to pass it through? How do you philosophically, think about where you should be in that type of a scenario? Thank you very much. Jonathan Sinclair: Sure. So I think that's when you think about our balance in terms of margin. Ultimately, we have to deal with input cost inflation and other headwinds and the pricing power of the brand is such that we're able to move price up in mid single digits year in and year out. And that creates a tailwind in gross margin. As I've said many times, we always seek to keep those two imbalance. We're not trying to advantage cost inflation over selling price inflation, quite the opposite. And we've been able to do that, but the many years and that includes in the pandemic and includes our prospects going forward. Now, one of the other things that we do is we have a very strong sourcing team and that enables us to manage our input cost inflation, very effectively. And such that actually, although there are always cost pressures in it. We are able to a accommodate those very effectively without unnecessary pressure on margin. So we're not looking at egregious up of moves in selling prices, and we're not looking at margin pressure in channel because we're managing this as it is very much in balance. Operator: Your last question comes from the line of Mark Petrie with CIBC. Your line is open. Mark Petrie: Yes, good morning. I just wanted to come back to the topic of diversification and the assortment and the ramp-up. I guess a couple of things, one, just a comment on lightweight down and the performance of that category in fiscal '21. Maybe across geographies and what that tells you about how the brand is. Is evolving or being adopted in some other markets, I guess specifically, China? And then also is, it's footwear, the right way to think about footwear sort of ramping more like spring like rain wear and also knitwear or maybe more like lightweight down, which I think was a bit of a faster ramp than those other categories? Dani Reiss: Thanks for your question. Let me - Dani well for us across all geographies and it's becoming a true pillar of our assortment in the whole process and asset collections this year been true home lines in that regard. And I will say for your other question? Jonathan Sinclair: Footwear related to other categories in the ramp. Dani Reiss: Yes, so footwear, I mean, I think this being the larger for footwear with the launch, with the type of product you'd expect from us as a fall-winter brand and I think we definitely have potential to expand into a much broader footwear assortment. And over time, and have that be a very material piece of business as well. So the overall business that we do. And I'm very excited about that. I think it's a significant category not just a couple of styles. Operator: This concludes the Q&A portion of today's call. I will now turn it back to you, Dani Reiss, Chairman and CEO for closing remarks. Dani Reiss: So, thank you. Thank you for everyone for joining us here today. Before we leave, I'd like to also take a moment to touch upon our commitment to diversity and inclusion. In Canada Goose, we embrace diversity in all its forms and definitions striving to remove barriers to create an inclusive culture and actual equitable workplace, where everyone authentically. To further this, we created an inclusion of Advisory Council, unify body to act as thought leaders advisors and managers have included within the internal community. We are currently in the process of hiring a leader of diversity and inclusion who will set the direction and drive our D&I strategy across the business. The traditional part of our leadership and teams to educate guide and champion diversity and inclusion strategies and initiatives. Thanks again for joining us today and I really look forward to answering you on our next call. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Canada Goose Holdings Inc. (GOOS) Earnings Preview: A Strong Value Investment Opportunity
- Canada Goose Holdings Inc. (GOOS) is expected to release its quarterly earnings with an EPS of $0.16 and projected revenue of $355 million.
- The company holds a Zacks Rank of #2 (Buy), indicating strong earnings estimate revision trends compared to Industria de Diseno Textil SA (IDEXY) with a Zacks Rank of #3 (Hold).
- Financial metrics such as a P/E ratio of 16.69, a price-to-sales ratio of 0.92, and an earnings yield of 5.99% suggest Canada Goose may be an undervalued investment.
Canada Goose Holdings Inc. (NYSE:GOOS) is a well-known player in the luxury apparel industry, specializing in high-quality outerwear. The company is set to release its quarterly earnings on Wednesday, May 21, 2025, before the market opens. Analysts expect an earnings per share (EPS) of $0.16 and project revenue to be around $355 million for this period.
Investors in the Retail - Apparel and Shoes sector often compare Canada Goose with Industria de Diseno Textil SA (IDEXY). According to Zacks Investment Research, Canada Goose holds a Zacks Rank of #2 (Buy), indicating strong earnings estimate revision trends. In contrast, IDEXY has a Zacks Rank of #3 (Hold), suggesting that GOOS may be a more favorable investment opportunity.
The Zacks Rank system evaluates stocks based on earnings estimates and revisions, focusing on value, growth, and momentum. Canada Goose's P/E ratio of 16.69 reflects the market's valuation of its earnings, while a price-to-sales ratio of 0.92 suggests a reasonable market value relative to sales. These metrics indicate that Canada Goose may be undervalued, making it an attractive option for value investors.
Canada Goose's financial health is further highlighted by its enterprise value to sales ratio of 1.33 and an enterprise value to operating cash flow ratio of 7.41. These figures provide insight into the company's valuation and cash flow generation. Additionally, an earnings yield of 5.99% offers a perspective on potential returns for investors.
The company's debt-to-equity ratio of 1.68 indicates its financial leverage, while a current ratio of 2.01 suggests a strong ability to cover short-term liabilities with short-term assets. These financial metrics, combined with a high Zacks Rank, position Canada Goose as a strong value investment opportunity.
Canada Goose (NYSE:GOOS) Faces Market Challenges Amid Luxury Sector Downturn
- Goldman Sachs sets a price target of $9 for Canada Goose (NYSE:GOOS), indicating a potential downside of approximately -19.93%.
- The company's stock returns to its initial public offering price, despite tripling its revenues, due to weak consumer spending in China and milder winters.
- GOOS is trading at a forward price-to-earnings ratio of 15.7, suggesting a speculative buying opportunity amidst market challenges.
Canada Goose (NYSE:GOOS) is a well-known luxury apparel company, famous for its high-end winter clothing. Despite its strong brand presence, the company is currently navigating a challenging market environment. Competitors like LVMH are also experiencing difficulties, indicating a broader trend in the luxury goods sector.
On October 21, 2024, Brooke Roach from Goldman Sachs set a price target of $9 for GOOS, while the stock was trading at $11.24. This target suggests a potential downside of approximately -19.93%. The stock's current price reflects market concerns, including reduced reseller orders and slowing growth in China.
Canada Goose's stock has returned to its initial public offering price, despite tripling its revenues. This decline is largely due to weak consumer spending in China and milder winters. However, a potential Chinese stimulus package and a developing La Niña weather pattern could boost demand for cold-weather apparel.
The company's efforts to expand its supply chain into Europe are impacting profit margins. Despite these challenges, GOOS is trading at a forward price-to-earnings ratio of 15.7, indicating a speculative buying opportunity if market conditions improve.
Recently, GOOS closed at $12.22, a 1.5% increase from its previous close, as highlighted by Zacks Investment Research. The stock has fluctuated between $11.10 and $11.30 during the day, with a market cap of approximately $1.09 billion. This movement suggests investor optimism despite broader market dips.
Canada Goose (NYSE:GOOS) Faces Market Challenges Amid Luxury Sector Downturn
- Goldman Sachs sets a price target of $9 for Canada Goose (NYSE:GOOS), indicating a potential downside of approximately -19.93%.
- The company's stock returns to its initial public offering price, despite tripling its revenues, due to weak consumer spending in China and milder winters.
- GOOS is trading at a forward price-to-earnings ratio of 15.7, suggesting a speculative buying opportunity amidst market challenges.
Canada Goose (NYSE:GOOS) is a well-known luxury apparel company, famous for its high-end winter clothing. Despite its strong brand presence, the company is currently navigating a challenging market environment. Competitors like LVMH are also experiencing difficulties, indicating a broader trend in the luxury goods sector.
On October 21, 2024, Brooke Roach from Goldman Sachs set a price target of $9 for GOOS, while the stock was trading at $11.24. This target suggests a potential downside of approximately -19.93%. The stock's current price reflects market concerns, including reduced reseller orders and slowing growth in China.
Canada Goose's stock has returned to its initial public offering price, despite tripling its revenues. This decline is largely due to weak consumer spending in China and milder winters. However, a potential Chinese stimulus package and a developing La Niña weather pattern could boost demand for cold-weather apparel.
The company's efforts to expand its supply chain into Europe are impacting profit margins. Despite these challenges, GOOS is trading at a forward price-to-earnings ratio of 15.7, indicating a speculative buying opportunity if market conditions improve.
Recently, GOOS closed at $12.22, a 1.5% increase from its previous close, as highlighted by Zacks Investment Research. The stock has fluctuated between $11.10 and $11.30 during the day, with a market cap of approximately $1.09 billion. This movement suggests investor optimism despite broader market dips.
Canada Goose Holdings, Inc. Quarterly Earnings Preview
- Canada Goose Holdings Inc. is set to announce its quarterly earnings with an expected EPS of $0.07 and a revenue forecast of $227.83 million.
- The appointment of Haider Ackermann as Creative Director marks a significant shift towards innovation and design excellence.
- Key financial ratios such as P/E, P/S, EV/Sales, EV/OCF, and D/E highlight the company's market valuation and financial health.
On Thursday, May 16, 2024, Canada Goose Holdings Inc. (NYSE:GOOS) is poised to unveil its quarterly earnings before the market opens, with Wall Street setting the earnings per share (EPS) expectation at $0.07 and forecasting revenue to hit around $227.83 million. This announcement comes at a pivotal time for the renowned outerwear brand as it embarks on a new chapter with the appointment of Haider Ackermann as its first-ever Creative Director. Ackermann, a celebrated figure in the fashion industry, is known for his modern design sensibilities and is expected to play a crucial role in shaping the future of Canada Goose's product offerings and enhancing the brand's creative aesthetic.
The strategic move to bring Ackermann on board signifies Canada Goose's commitment to innovation and excellence in design. Ackermann's appointment is not just a testament to his creative prowess but also aligns with the company's core values of authenticity, craftsmanship, and performance. Under the leadership of Dani Reiss, Chairman & CEO of Canada Goose, and with Ackermann's creative direction, the brand is set to steer into its next era, promising exciting developments for its product line and overall brand aesthetic.
This transition is marked by the launch of an exclusive style, heralding the beginning of Ackermann's influence on Canada Goose's offerings. As highlighted by Business Wire, this move is celebrated within the industry and is anticipated to have a significant impact on the brand's market positioning and product innovation. The appointment of Ackermann and the introduction of new designs under his creative leadership are expected to resonate well with consumers and investors alike, potentially influencing the company's financial performance in the upcoming quarters.
Financially, Canada Goose exhibits a price-to-earnings (P/E) ratio of approximately 36.96, indicating strong investor confidence in its earnings potential. The company's price-to-sales (P/S) ratio stands at about 1.22, and its enterprise value-to-sales (EV/Sales) ratio is approximately 1.69, reflecting its valuation in relation to its sales. Additionally, with an enterprise value to operating cash flow (EV/OCF) ratio of around 24.09, it highlights the market's valuation of the company in terms of its operating cash flow. Despite a debt-to-equity (D/E) ratio of approximately 1.87, indicating a higher reliance on debt financing, the current ratio of about 1.87 suggests the company is well-positioned to cover its short-term liabilities with its short-term assets. These financial metrics will be crucial for investors to watch in the upcoming earnings release, as they provide insight into the company's financial health and operational efficiency.
Canada Goose Shares Drop 9% on Guidance Cut
Canada Goose (NYSE:GOOS) unveiled its second-quarter results, with projections for the full year falling short of analyst forecasts. As a result, shares plunged more than 9% intra-day today.
For Q2, they posted a revenue of C$281.1 million, slightly surpassing the anticipated C$279.2 million. The EPS of C$0.16 outperformed the projected loss of C$0.16.
For the upcoming third quarter of 2024, management projects revenues between $575 million and $700 million. For the entire fiscal year, the expected revenue lies between $1.2 billion and $1.4 billion, a dip from the initially forecasted $1.4 billion to $1.5 billion.
Canada Goose Shares Drop 9% on Guidance Cut
Canada Goose (NYSE:GOOS) unveiled its second-quarter results, with projections for the full year falling short of analyst forecasts. As a result, shares plunged more than 9% intra-day today.
For Q2, they posted a revenue of C$281.1 million, slightly surpassing the anticipated C$279.2 million. The EPS of C$0.16 outperformed the projected loss of C$0.16.
For the upcoming third quarter of 2024, management projects revenues between $575 million and $700 million. For the entire fiscal year, the expected revenue lies between $1.2 billion and $1.4 billion, a dip from the initially forecasted $1.4 billion to $1.5 billion.
Canada Goose Shares Up 9% Following Q4 Results
Canada Goose (NYSE:GOOS) shares rose more than 9% today following the company’s reported Q4 results, with EPS of C$0.04 coming in above the Street estimate of (C$0.01). Revenue was C$223.1 million, slightly missing the Street estimate of C$223.9 million.
The company provided its full 2023-year outlook, expecting revenue of C$1.35 billion at a midpoint, compared to the consensus estimate of C$1.30 billion. EPS is expected to range from C$1.60 to C$1.90.
Although the company said that a return to regular trading levels in Mainland China is a driver of 2023’s fiscal outlook, 4 out of 16 retail stores there remain closed due to COVID. Q4 revenue growth in China was missing from this morning’s press release, which suggests it was likely very weak.
