Canada Goose, the renowned luxury clothing brand, experienced a significant surge in its stock price, with shares increasing by 16% after the company released its earnings report for the fiscal fourth quarter. The company also announced its expectations for year-over-year sales growth for fiscal year 2025, further boosting investor confidence.
In terms of earnings per share, Canada Goose reported 5 Canadian cents, slightly below the estimated 7 Canadian cents. However, the company’s revenue for the quarter amounted to CA$358 million (US$263 million), surpassing the expected CA$315.5 million (US$232 million) predicted by LSEG. This represents a 22% increase in revenue compared to the same period last year.
Neil Bowden, Canada Goose’s chief financial officer, highlighted that while store comparisons remained relatively flat, the company achieved significant year-over-year sales growth across various regions. Greater China, which includes Mainland China, Hong Kong, Macau, and Taiwan, experienced a remarkable 29.7% increase in sales. The broader Asia-Pacific region, excluding Greater China, also saw a notable growth of 29.1%. Additionally, North American sales witnessed a solid increase of 24.5%.
Bowden attributed this growth to domestic shopping on the Chinese mainland as well as mainland tourists driving strong growth in Hong Kong and Macao. He emphasized the success of the company’s Lunar New Year marketing campaign and a longer peak selling period due to the later date of the Lunar New Year compared to the previous year.
Looking ahead, Canada Goose expects mid-single-digit percentage revenue growth for the next fiscal year, largely driven by advancements in the direct-to-consumer business. Bowden also anticipates comparable store sales to grow in the low single digits. However, he acknowledged that North America has faced some pressure, while China and the Asia-Pacific region have experienced more robust growth.
It is worth noting that this positive performance comes after Canada Goose’s decision to reduce its corporate workforce by 17% in March. The company reported that these layoffs resulted in approximately CA$20 million (US$14.7 million) in productivity improvements and cost savings for the fiscal fourth quarter.
In conclusion, Canada Goose’s strong earnings report and the expectation of future sales growth have propelled its stock price to new heights. The company’s success in the Chinese and Asia-Pacific markets, coupled with strategic cost-saving measures, has instilled confidence in investors. As Canada Goose continues to focus on its direct-to-consumer business and adapt to market dynamics, it is poised for further growth and success in the luxury clothing industry.
