The Canadian clothing retailer Canada Goose Inc. presented unglamorous figures for the third quarter of 2021/22 on Thursday. In addition, the down jacket specialist from Toronto cut its forecast for the year. Naturally, this was not well received by the residents: the company’s share price has meanwhile dropped by more than twenty percent.
For the quarter ended January 2, Canada Goose had sales of CA$586.1 million (EUR 403.6 million). This corresponded to an increase of 23.6 percent compared to the same period of the previous year and was in line with expectations. Adjusted for the share of sales from protective clothing, which the company had temporarily produced in 2020 to compensate for losses caused by the pandemic, sales grew by 26.5 percent.
In its own retail business, sales increased by 48.8 percent to 445.4 million Canadian dollars. According to the clothing retailer, newly opened stores, higher sales in long-established stores and an increase of 28.1 percent in global e-commerce were responsible for the strong growth. In the wholesale business, however, revenues shrank by 15.0 percent to 136.7 million Canadian dollars. The company justified the decline by saying that delivery dates had been brought forward to the second quarter at the request of trading partners.
Although higher marketing expenses, investments and personnel costs as well as a lower share of sales of the particularly profitable parkas weighed on the margins, Canada Goose was able to increase its operating profit by 34.3 percent to CA$205.9 million. Quarterly net income grew 42.0 percent to 151.9 million Canadian dollars (104.6 million euros), but just missed market expectations.
The company admitted that business in the current quarter has so far been weaker than expected. In the Asia-Pacific region and in the EMEA region, which includes Europe, the Middle East and Africa, sales and footfall have been below expectations, and there have also been additional burdens from new restrictions resulting from the omicron variant of the coronavirus Canada Goose.
In light of this, management lowered its full-year revenue guidance to between $1.090 billion and $1.105 billion from a previous range of between $1.125 billion and $1.175 billion. The earnings target was also revised down significantly: The company now only expects adjusted earnings per share in the range of 1.02 to 1.11 Canadian dollars. So far, 1.17 to 1.33 Canadian dollars had been forecast.