Thanks to strong growth in Asia, clothing supplier Canada Goose Holdings Inc. was able to increase its sales in the third quarter of the 2023/24 financial year. However, the reported net profit fell short of the previous year’s level.
According to an interim report published on Thursday, the Toronto-based down jacket specialist generated sales of 609.9 million Canadian dollars (419.3 million euros) in the period from October to December, exceeding the level of the previous year’s quarter by 5.8 percent . Adjusted for exchange rate changes, revenue increased by 5.3 percent.
In its own retail sector, sales increased by 14.2 percent (currency-adjusted +13.9 percent) to 514.0 million Canadian dollars. In the wholesale business, however, it fell by 28.5 percent (-29.6 percent adjusted for currency effects) to 81.8 million Canadian dollars.
The strong growth in Asia can more than compensate for sales losses in America and Europe
The clothing supplier owed its solid increase to strong growth in the Asia-Pacific region. Sales there rose by 61.5 percent (currency-adjusted +62.9 percent) to 270.7 million Canadian dollars. The main reason for the significant improvement was the recovery in demand in China. In the same quarter of the previous year, businesses there had suffered from temporarily tightened protective measures against the Covid-19 pandemic.
In the other markets, however, Canada Goose had to accept significant losses due to lower revenues in the online and wholesale business: In North America, sales fell by 13.6 percent (-14.7 percent adjusted for currency effects) to 252.4 million Canadian dollars In the EMEA region, which includes Europe, the Middle East and Africa, it shrank by 25.9 percent (-27.1 percent at constant currencies) to 86.8 million Canadian dollars.
Thanks to a higher gross margin, operating profit increases
Thanks to an improved gross margin, operating profit rose by 4.2 percent to 198.8 million Canadian dollars despite higher expenses for its own retail network and negative special effects. However, the quarterly surplus attributable to shareholders fell by 4.4 percent to 131.4 million Canadian dollars (90.3 million euros). Adjusted for special effects, it grew by 3.0 percent.
In view of the available figures, management specified its forecasts for the current financial year. The target range for sales, which had previously been between 1.2 and 1.4 billion Canadian dollars, was narrowed to 1.285 to 1.305 billion Canadian dollars. Earnings before interest and taxes (EBIT) adjusted for special effects are now expected to reach between 146 and 158 million Canadian dollars. So far, 135 to 225 million Canadian dollars had been promised.