Canada Goose predicts upbeat annual sales and profits on China recovery hopes

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Tags are seen on Canada Goose jackets at a store in Manhattan, New York, U.S., February 7, 2022. REUTERS/Andrew Kelly

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May 19 (Reuters) – Canada Goose Holdings Inc (GOOS.TO) on Thursday forecast annual sales and profit to beat Wall Street expectations on hopes of a recovery in the key China market and as the demand for its luxury parkas and jackets remains strong.

Luxury goods sales remained robust in North America, with shoppers showing pre-pandemic trends as soaring gas and food prices failed to deter affluent consumers from splurging on items top of the line.

The Canadian company’s U.S.-listed shares, which also posted a surprise quarterly profit, rose 5% following a broad sell-off in the market on Wednesday triggered by poor results from U.S. retailers.

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As store closures and lower traffic in China resulting from a new round of closures impacted the winterwear maker’s business in the quarter under review, chief executive Dani Reiss said. confident about a recovery in the region.

The environment in China will likely change by the third or fourth quarter, and things should return to normal, Reiss told Reuters in an interview.

Known for its pricey red parkas, Canada Goose has remained immune to soaring supply chain costs that have rocked the retail sector, and said it does not expect that supply issues affect the coming year. The company manufactured about 84% of its products in Canada last year.

For fiscal year 2023, Canada Goose expects revenue to be between C$1.30 billion ($1.01 billion) and C$1.40 billion. Analysts on average expect C$1.30 billion, according to Refinitiv IBES data.

The company forecast full-year adjusted earnings per share of C$1.60 to C$1.90, compared to analysts’ average estimate of C$1.61.

However, the luxury outerwear maker expects first-quarter revenue to fall below market estimates due to weakness in the Asia-Pacific region.

($1 = 1.2816 Canadian dollars)

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Reporting by Deborah Sophia and Mehr Bedi in Bengaluru; Editing by Vinay Dwivedi

Our standards: The Thomson Reuters Trust Principles.

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