Canada Goose’s stock rockets 12.6% after company offers upbeat guidance

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Canada Goose Holdings Inc.’s stock soared 12.6% early Thursday, after the luxury outerwear maker offered upbeat guidance for 2024 that was ahead of consensus estimates.

The Toronto-based company
which is known for its down jackets, provided the outlook as it posted fiscal third-quarter earnings that matched estimates. Chief Executive Dani Reiss said earnings were boosted by strong growth in the Asia Pacific region, as revenue rose across categories.

“While we continue to operate in a challenging consumer spending environment, we are encouraged by our holiday performance, which saw record traffic levels and strong revenue generated during key consumer moment,” Reiss said in a statement.

The company saw a record Black Friday long holiday shopping weekend when store traffic hit a record and revenue rose more than 40% from the year-earlier period.

The company had net income of C$131.4 million ($97.7 million), or C$1.29 a share, for the quarter to end-December, down from C$137.5 million, or C$1.28 a share, in the year-earlier period.

Adjusted per-share earnings came to C$1.37, matching the FactSet consensus.

Revenue rose to C$609.9 million from C$576.7 million a year ago, while FactSet expected C$610.0 million.

The company is now expecting fourth-quarter adjusted EPS of 2 cents to 13 cents and sales of C$310 million to C$330 million. The FactSet consensus is for EPS of 8 cents and sales of C$299 million.

For all of fiscal 2024, it expects adjusted EPS of 82 cents to 92 cents, compared with prior guidance of 60 cents to C$1.40. It expects revenue of C$1.285 billion to C$1.305 billion, compared with prior guidance of C$1.200 billion to C$1.400 billion.

The FactSet consensus is for EPS of 86 cents and revenue of C$1.279 billion.

The company is expecting its direct-to-consumer revenue as a percentage of total revenue to climb to about 70%. It expects wholesale revenue growth to fall by a high-teens percentage rate, as it continues to “edit” its wholesale door count, take returns from partners, see revised re-order expectations and expand its retail store network.

The company plans to open three permanent stores in the fourth quarter to boost the network to 68.

Canada Goose is still the object of criticism from animal-rights activists, who object to its use of feathers from geese and ducks. However, PETA, or People for the Ethical Treatment of Animals, ended one campaign in 2021, after the company agreed to stop using fur in its products.

The company also took steps to be more eco-conscious, introducing, for instance, the Standard Parka, which generates 30% less carbon and requires 65% less water during production versus the Expedition Parka.

The stock is still down 51% in the last 12 months, while the S&P 500
has gained 18.6%.

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