FX168 Financial News (North America) News The fourth-quarter revenue and profit announced by Canada Goose (Canada Goose) on Thursday (May 16) exceeded Wall Street expectations. Thanks to the rebound in the North American market and China's steady demand for its expensive down jackets, the company's US listed stock rose more than 16%.
(Source: Yahoo Finance)
Revenue in North America increased 24.5%, compared to a 14% decline in the previous quarter. Wholesale revenue fell 9% after falling 28% in the previous quarter.
Yahoo Chief Financial Officer Neil Bowden (Neil Bowden) said in a conference call after the earnings report was released that compared with the same period last year, online traffic increased in January as seasonal weather increased.
Sales of the company's luxury parka (retail over $1,000) are sluggish as consumers cut discretionary spending and retailers also cut excess inventory in the US
Javier Gonzalez Lasta (Javier Gonzalez Lasta), portfolio manager at Tema ETFs that focuses on luxury goods, said the market is worried that investors may see a larger inventory removal or decline in the wholesale industry.
As of Wednesday's close, Canada Goose's stock price had fallen by about 3% this year, after falling 33.5% in 2023, as market concerns about luxury consumption weighed on the company's stock price against the backdrop of rising interest rates and high inflation.
(Source: Reuters)
Sales in Greater China increased by around 30% due to increased consumer spending in domestic and foreign markets.
“Overall, I think this is a very bad luxury environment... [Canada Goose's performance] shows different attributes compared to other luxury goods,” said Cole Smead, CEO of Smead Capital Management.
Some luxury brands have indicated that demand for their products in the Chinese market is slowing down. China is struggling to deal with the housing crisis and youth unemployment.
Canada Goose expects revenue for fiscal year 2025 to grow by a lower single digit compared to the same period last year. In comparison, revenue growth for the 2024 fiscal year was approximately 10%.
The company also withdrew its long-term growth target announced last year, citing changes in the business environment, including a more challenging consumer spending environment.
According to LSEG data, Canada Goose's fourth quarter revenue rose to 358 million Canadian dollars (262.71 million US dollars), and analysts estimated 315.5 million Canadian dollars.
Earnings per share were $19, which was higher than the estimate of $7.