Categories Earnings, Retail

Canada Goose posts upbeat Q3 results, lifts outlook

Canada Goose Holdings Inc. (GOOS) reported a 64% jump in earnings for the third quarter helped by higher order values, shipment timing, favorable forex, incremental revenue, and strong retail stores performance. The results exceeded analysts’ expectations. The premium outdoor apparel maker lifted its guidance for fiscal 2019.

Net income climbed 64.1% to C$103.4 million and earnings jumped 66.1% to C$0.93 per share. Adjusted earnings surged 65.5% to C$0.96 per share.

Revenue inched up 50.2% to C$399.3 million. On a constant currency basis, revenue grew by 49%. The results were positively impacted by the higher proportion of customers purchased product earlier in the second half of fiscal 2019 relative to the same period last year.

Wholesale revenue increased 22.2% on higher order values from existing partners, earlier shipment timing relative to last year, favorable foreign exchange fluctuations, and incremental revenue from the acquisition of the business of Baffin Inc. DTC revenue soared 78.7% on incremental revenue from five new retail stores and one new e-commerce site, as well as strong performance of existing retail stores and e-commerce sites.

Looking ahead into fiscal 2019, the company now expects revenue growth in the mid-to-high thirties on a percentage basis compared to the prior forecast of at least 30%. Adjusted EPS growth is now predicted to be in the mid-to-high forties on a percentage basis compared to at least 40% earlier expected. Adjusted EBITDA margin expansion is still anticipated to be at least 150 basis points compared to fiscal 2018.

Ralph Lauren’s shares soar 11% on Q3 results beat

Capital expenditures are anticipated to be about C$70 million including investments in new retail stores, IT and manufacturing capacity. Wholesale revenue growth is predicted to be in the mid-to-high teens on a percentage basis, compared to high-single-digits, due to sales outperformance in the channel year-to-date.
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“Fiscal 2019 is shaping up to be another year of impressive results. In our peak selling season we continued to deliver when and where it matters most, while also strengthening our foundation for future success on the global stage,” said Dani Reiss, President & CEO.

The fiscal year of the company currently ends on March 31 each year. Effective for fiscal 2020-and subsequent years, the company will adopt a 52 or 53-week reporting cycle, common in the retail industry, with the fiscal year ending on the Sunday closest to March 31. Fiscal 2020 will end on March 29, 2020. The quarters in fiscal 2020 will end on June 30, September 29, and December 29, 2019.

Shares of Canada Goose opened higher but changed course to the red territory on Thursday. The stock has risen over 66% in the past year while it has fallen over 5% in the past three months.

 

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