Canadian clothing retailer Canada Goose Holdings Inc. reported solid numbers for the second quarter of the 2023/24 fiscal year on Wednesday. However, in view of the recent decline in demand in important markets, the down jacket specialist from Toronto lowered its forecasts for the year as a whole. He also announced the replacement of important leadership positions.
In the three months to October 1, the company generated sales of 281.1 million Canadian dollars (192.5 million euros). This means that revenues exceeded the level of the previous year’s quarter by 1.4 percent. However, adjusted for exchange rate changes, they fell by 2.8 percent.
Losses in sales in North America are offset by increases in Europe and Asia
Mainly due to the difficult market conditions in the USA, sales in North America fell by 6.6 percent (-8.1 percent adjusted for currency effects) to 124.1 million Canadian dollars. In the EMEA region, which includes Europe, the Middle East and Africa, revenues rose by 6.0 percent (-3.9 percent at constant currency) to 93.2 million Canadian dollars, and in the Asia-Pacific region they even increased by 13, 1 percent (currency-adjusted +11.2 percent) and reached 63.8 million Canadian dollars.
Increased operating expenses and one-off charges as part of the ongoing reform program caused operating profit to slip from 21.5 million Canadian dollars to 2.3 million Canadian dollars despite a higher gross margin. However, net profit attributable to shareholders rose from 3.3 to 3.9 million Canadian dollars (2.7 million euros) thanks to higher tax refunds, exceeding market expectations.
Weaker general conditions: Management is lowering its sales and earnings targets for the current financial year
Management admitted that the momentum observed at the beginning of the quarter had weakened noticeably since September, citing “increasingly difficult macroeconomic and geopolitical conditions.”
As a result, the company lowered its expectations for the full year. The sales forecast, which had previously been between 1.4 and 1.5 billion Canadian dollars, was lowered to 1.2 to 1.4 billion Canadian dollars. The target corridor for earnings before interest and taxes (EBIT) adjusted for special effects is now between 135 and 225 million Canadian dollars. Previously, 210 to 240 million Canadian dollars had been promised.
Neil Boden will be the new CFO next April
In addition to the current figures, the clothing provider also announced other important personnel decisions. Accordingly, Chief Financial Officer (CFO) Jonathan Sinclair will move to the position of President, APAC on April 1 next year. Sinclair’s current role will then be taken over by Neil Bowden, who is currently the company’s deputy chief financial officer.
Larry Li will also receive a new area of responsibility on January 1st. The previous person responsible for business in mainland China will become the new Chief Operating Officer (COO) for the APAC region at the turn of the year. The search for a new president, Mainland China, is already underway, Canada Goose said.