- Canada Goose revises 2020 outlook due to Coronavirus health crisis
- CEO Dani Reiss confident in “long-term potential”
- Asia sales doubled to CAD$94.7 million
- Shares were down CAD$1.99 (4.51%) and trading at CAD$42.16 per share
Luxury snow apparel brand Canada Goose has revised its 2020 outlook due to the effect of the Coronavirus health crisis, resulting in a material impact on sales performance despite doubling sales in Asia for Q3 2020.
President and CEO Dani Reiss said despite the challenges the company is confident in the long-term outlook and believes the change in consumer behaviour is a temporary reaction to health precautions in extraordinary circumstances.
“We delivered robust growth in the third quarter, notwithstanding geopolitical headwinds and an expected revenue timing shift in our wholesale business,” she said.
“Our DTC expansion continues to unlock and accelerate our development in major international markets,”
“From the frequent lines outside our stores to the response to new experiential innovations, consumer engagement was consistently strong across all geographies during peak season,”
“While we recognize that we are now navigating a period of heightened uncertainty due to the coronavirus health crisis, we remain confident in our strategy and long-term potential.”
In particular, the company expects a revised annual revenue growth of 13.8% to 15%, which implies a revenue of CAD$945 million to CAD$955 million; an EBIT contraction of 330 to 280 basis points, which implies an adjusted EBIT margin of 21.6% to 22.1%; a decline in annual growth in adjusted net income per diluted share of 2.2% to 0.7%, which implies an adjusted net income per diluted share of CAD$1.33 to CAD$1.37.
The company also reported that total revenue increased by 13.2% to CAD$452.1 million; net income was CAD$118 million, or CAD$1.07 per diluted share; an adjusted earnings before interest and taxes (EBIT) of CAD$163.8 million.
It also said there were no interruptions to supply chains and that business momentum in greater China strong, as reflected in the region’s revenue jump to CAD$94.7 million from CAD$46.4 million prior the Coronavirus outbreak.
In addition to the doubling of Asian revenue, Canada Goose was the top performing brand on Trall’s Luxury Pavilion during the Singles day and Double 12 shopping festivals, with e-commerce traffic and revenue growing in mainland China, and over 8000 people undertaking ‘The Journey’ event – a new retail concept at CF Sherway Gardens in Toronto.
At the time of writing Canada Goose shares were down CAD$1.99 (4.51%) and trading at CAD$42.16 per share. It has a market capitalization of CAD$2.5 billion.