By The Canadian Press on February 1, 2024.
TORONTO – Canada Goose Holdings Inc. enjoyed skyrocketing sales in Asia last quarter after China lifted COVID-19 restrictions, even as revenue fell sharply in North America and Europe.
The luxury apparel company said purchases in Macao and Hong Kong led the way spurred by tourism from mainland China, where store traffic doubled. Sales in Asia jumped 62 per cent year over year in the quarter ended Dec. 31.
“Strength in (Asia-Pacific) reflects both the colder weather in greater China in Q3 as well as (the end of) store closures last year relating to COVID-19 restrictions,” chairman and CEO Dani Reiss told analysts on a conference call Thursday.
The Pacific surge fuelled a total year-over-year revenue boost of six per cent in its third quarter.
Closer to home, however, the Toronto-based company saw sales drop off. Warmer weather through the fall and early winter alongside weaker consumer demand caused by high inflation and interest rates drove down revenues by nearly 14 per cent in Canada and the U.S.
“Where we saw the pressure was just consumers feeling that pinch – a little less loose with their wallets,” said Carrie Baker, one of four presidents at the company best known for its parkas.
“Weather didn’t help,” she said. “Winter just didn’t come for them. And so they didn’t have that same sort of spur to get their typical winter jackets.”
In Europe, the Middle East and Africa – the segment that comprises the smallest slice of Canada Goose earnings – revenue fell 26 per cent.
On Thursday, the company reported $130.6 million in net income attributable to shareholders for its third-quarter.
The profit amounted to $1.29 per diluted share for the quarter ended Dec. 31 compared with net income attributable to shareholders of $134.9 million or $1.28 per diluted share a year earlier, when it had more shares outstanding.
Revenue for the quarter totalled $609.9 million, up from $576.7 million in the same period a year earlier.
On an adjusted basis, Canada Goose said it earned $1.37 per diluted share in its latest quarter, up from an adjusted profit of $1.27 per diluted share a year earlier and roughly in line with analyst expectations, according to financial markets data firm Refinitiv.
The company projected revenue of between $310 million and $330 million for its fourth quarter and an adjusted profit between two and 13 cents per diluted share.
For its full 2024 financial year, Canada Goose forecast total revenue of $1.28 billion to $1.31 billion, compared with its earlier guidance of between $1.2 billion and $1.4 billion.
It said adjusted net income per diluted share would likely land between 82 cents and 92 cents compared with earlier guidance for between 60 cents and $1.40.
This report by The Canadian Press was first published Feb. 1, 2024.
Companies in this story: (TSX:GOOS)