Canada Goose projects nearly $900 million in 2022 and grows as global all-season brand


As an outerwear brand that promises to protect its wearers against the worst that winter can throw at them, Canada Goose Holdings just announced that it has weathered the worst of the Covid pandemic and come out stronger. strong.

Boosted by Q3 2022 revenue up 26.5% year-over-year, Canada Goose is on track to top C$1 billion (~US$800 million) for the first time ever . Note: The following figures have been converted from CAN$ to USD.

Historically, its third fiscal quarter, which ends at the end of the calendar year, is the strongest. And CEO Dain Reiss told me that this year, “We had the best third quarter ever.”

Third-quarter revenue hit $462 millionexcluding temporary PPE sales, and net profit was $120 million, up 41% from $84 million a year ago.

Third-quarter sales likely would have been even higher had the Omicron variant not created regional disruptions in retail traffic. This caused the company to slightly cut its year-end guidance to $860-870 million from $890-930 million previously.

Wall Street was not pleased, sending the stock price plummeting from $34.31 at the Feb. 9 close to a Feb. 10 close of $28.73. Nonetheless, Reiss proudly reports, “Our momentum continues,” adding, “This is driven by the strong foundation we have built and our continued execution.

Taking a broader view of business performance in the first three quarters, Canada Goose hit $691 million this year, up 26% from $548 million last year and 7 % from $645 million in FY2020.

While sales in Canada are still lagging this year compared to pre-pandemic fiscal year 2020, $141 million compared to $198 million in 2020, the United States is almost on par, $184 million dollars compared to 192 million dollars in 2020.

But growth in the rest of the world is skyrocketing, up 44% from $254 million to $365 million this year.

Go Global

The company’s previous guidance called for continued, exhilarating growth outside of North America, but in the third quarter it encountered speed bumps in Asia-Pacific (APAC) and Europe, Middle East, Africa (EMEA). ) due to the novel Covid outbreak and resulting restrictions.

“We view these disruptions as temporary,” Reiss said on the earnings call. “And in the case of APAC, we’ve seen sequential improvement over the past two weeks.” On the other hand, CFO Jonathan Sinclair indicated that EMEA is even further behind in reaching normal retail operations.

Despite the current temporary downturn, Canada Goose has seen incredible growth over the past two years in the first three quarters. APAC increased by 60% and EMEA by 28%.

As a result, its worldwide distribution has fallen from 61% in North America – 31% in Canada and 30% in the United States – in the first three quarters of fiscal 2020 to 47% so far during in fiscal 2022 – 20% in Canada and 27% in the United States. the share increased from 20% in the first three quarters of fiscal 2020 to 29% in 2022 and the EMEA region from 20% to 23%.

The business is heavily dependent on retail traffic in Asia and Europe. Of its 45 stores in total, including popups, there are 20 stores in APAC, ten in EMEA, nine in Canada, and just six in the United States. Thus, the United States is well above its weight and society expects the United States to exceed pandemic levels once international travel resumes.

And no matter where customers live, they can get their coveted Canada Goose items online. It serves more than 50 national markets via e-commerce.

A brand for all seasons

Besides expanding the company’s sales around the world, Canada Goose has a particular challenge given its traditional focus on winter outerwear. Historically, its quarterly sales have swung wildly with around 80% of revenue generated in its second and third fiscal quarters.

To balance out these seasonal fluctuations, she launched her first non-outerwear knitwear collection in 2017 and has expanded her all-season range since then. Although the company does not publish its revenue by product line, it did report that sales of its non-parka products increased 75% in the third quarter of 2022.

The launch of its debut footwear collection, which the company said garnered strong consumer response, highlighted its “Beyond the Parka” expansion strategy this quarter.

Next quarter, a line of spring shoes will be launched, as the company sees strong potential in the category. And thanks to its 2018 acquisition of Canadian footwear company Baffin, it has the resources to capitalize on it.

The company has also received warm acclaim for what it describes as “its first full expression of the Canada Goose lifestyle” in its Pastels collection, including sweatshirts, outerwear, accessories and footwear. It was popular with women and the collection is expected to expand this year.

Through collaborations, Canada Goose presents innovative interpretations of its classic styles. A collection made with streetwear label Concepts and Japanese label BAPE sold out within days, Reiss reported.

Currently, it features a collaborative collection with Chinese designer Angel Chen and an NBA collaboration awaits behind the scenes.

Strong supply chain

With the current news cycle captivated by the “Freedom Convoy” of Canadian truckers and the resulting traffic blockade, Reiss is confident that the company’s supply chain can handle it.

“We continue to see how beneficial our ‘Made in Canada’ supply chain strategy really is,” he says. “We manufacture all of our products here in Canada and this is a strategic and sustainable decision we made decades ago. It continues to pay off. We have not experienced any hardware or supply chain margin headwinds and are very confident in our vision for 2023.”

In conclusion, Reiss reiterates, “We are building a sustainable global lifestyle brand and expanding roles throughout the year. We delivered a strong financial performance this quarter, which is a testament to our strategy and how well it is working. »


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