Canada Goose Q3 revenue up but trims FY22 outlook

For the third quarter, Canada Goose Holdings Inc. reported revenue increase of 26.5 percent, excluding 10.7 million Canadian dollars of temporary PPE sales in the comparative quarter. Including temporary PPE sales, total revenue increased by 23.6 percent.

Due to lower than expected revenue and retail traffic in APAC and EMEA in the current quarter, alongside new variant outbreaks and restrictions, Canada Goose has lowered its outlook for the fiscal year 2022.

“Canada Goose’s brand momentum and supply chain resilience drove a strong performance in our largest quarter. Our digital business continued to exceed last year’s outsized gains, alongside a sharp improvement in retail productivity,” said Dani Reiss, president & CEO of the company.

Review of Canada Goose’s third quarter results

The company said, total non-parka revenue increased by 74.9 percent, global ecommerce revenue increased by 28.1 percent and DTC revenue in Mainland China increased by 35.1 percent.

The company’s total revenue was 586.1 million Canadian dollars. As fiscal 2022 is a 53-week year, the additional week included in the third quarter ended January 2, 2022 provided 40.9 million Canadian dollars of revenue.

DTC revenue was 445.4 million Canadian dollars from 299.4 million Canadian dollars. The majority of the increase, the company added, was driven by higher sales from existing retail stores, complemented by ecommerce growth and retail expansion.

Wholesale revenue was 136.7 million Canadian dollars from 160.8 million Canadian dollars. The decrease was a result of earlier order shipment timing relative to fiscal 2021, driven by wholesale partner requests.

Other revenue was 4 million Canadian dollars from 13.8 million dollars. The decrease was attributable to temporary PPE sales in the comparative quarter.

Gross profit was 413.8 million Canadian dollars, a gross margin of 70.6 percent compared to 316.4 million Canadian dollars and 66.8 percent. Operating income was 205.9 million Canadian dollars, an operating margin of 35.1 percent compared to 153.3 million Canadian dollars and 32.3 percent.

Net income was 151.9 million Canadian dollars or 1.41 Canadian dollars per diluted share, compared to 107 million Canadian dollars or 0.96 Canadian dollars per diluted share. Non-IFRS adjusted EBIT was 206.9 million Canadian dollars, an adjusted EBIT margin of 35.3 percent, compared to 157.9 million Canadian dollars and 33.3 percent. Non-IFRS adjusted net income was 152.6 million Canadian dollars or 1.42 Canadian dollars per diluted share compared to 111.9 million Canadian dollars or 1.01 Canadian dollars per diluted share.

Canada Goose revises fiscal 2022 outlook

The company now expects total revenue of 1.090 billion Canadian dollars to 1.105 billion Canadian dollars, compared to 1.125 billion Canadian dollars to 1.175 billion Canadian dollars.

Non-IFRS adjusted EBIT is expected at 165 million Canadian dollars to 175 million Canadian dollars at an adjusted EBIT margin of 15.1 percent to 15.8 percent compared to 186 million Canadian dollars to 208 million Canadian dollars at an adjusted EBIT margin of 16.5 percent to 17.7 percent.

Non-IFRS adjusted net income per diluted share is expected between 1.02 Canadian dollars to 1.11 Canadian dollars compared to 1.17 Canadian dollars to 1.33 Canadian dollars.

The company forecasts DTC revenue at approximately 68 percent of total revenue, compared to approximately 70 percent and wholesale revenue growth of 6 percent to 7 percent, compared to mid-single digits.