Not least due to ongoing problems in China, the Canadian clothing supplier Canada Goose Holdings Inc. closed the third quarter of the 2022/23 financial year with disappointing figures. The latest results, which the Toronto-based down jacket specialist released on Thursday, fell short of market expectations and prompted the company’s share price to fall by more than 7 percent.
For the quarter ended January 1, Group sales were CAD$576.7 million (EUR396.2 million), down 1.6 percent (-2.2 percent at constant currency) from the same period last year. The company blamed the postponement of delivery dates in the wholesale business and problems in China due to the temporarily tightened protective measures against the Covid-19 pandemic.
The earlier delivery of goods to trading partners compared to the previous year had a noticeable effect in Canada and Europe in particular. Quarterly revenue shrank 6.8 percent to CAD$109.2 million in the home market and 8.4 percent (-7.3 percent at constant currency) in the EMEA region, which includes Europe, the Middle East, Africa and Latin America. to 117.1 million Canadian dollars.
Pandemic-related losses in China caused sales in the entire Asia-Pacific region to fall by 5.2 percent (-3.4 percent in constant currency) to CAD 167.6 million. On the other hand, business developed robustly in the USA: sales there rose by 11.3 percent (currency-adjusted +6.3 percent) to 182.8 million Canadian dollars.
Although the company was able to improve its gross margin, it had to report an unexpectedly significant drop in profit due to negative currency effects, higher investments and cost increases due to expansion. Operating profit fell 5.2 percent from the same quarter last year to CA$194.3 million, while net income attributable to shareholders shrank 10.8 percent to CA$134.9 million (EUR 92.7 million).
In view of the sobering development, the clothing supplier cut its forecasts for the current financial year. Management now expects 2022/23 revenue to be in the range of CA$1.175 billion and CA$1.195 billion after previously forecasting CA$1.2 billion to CA$1.3 billion. Adjusted earnings before interest and tax (EBIT) target has been reduced from CAD$215-255 million to CAD$167-182 million.