Canada Goose (TSX:GOOS)(NYSE:GOOS) got off to a scorching hot start after its initial public offering in March 2017. The company is known for heating up its customers with its high-end winter clothing, but the brand has generated huge excitement over the past decade. It has broken from its utilitarian roots into a highly sought-after fashion brand.
The stock has not fared so well in 2019, however. Shares have dropped 6.3% this year as of close on September 24. Canada Goose took a major hit in December 2018 as geopolitical tensions erupted between Canada and China. The company has laid out a growth strategy that is heavily reliant on Chinese expansion. Fortunately, the grand opening of its store in Beijing went off very well.
Shares suffered after the release of its first quarter fiscal 2020 results.
Canada Goose’s margins disappointed analysts. However, this was because its spring offerings do not boast the profitability of its more expensive parkas. Unsurprisingly, the company expects to see more sales for its parkas in the third and fourth quarter as the weather cools down.
In my view, Canada Goose has received an unfair shake over the past year. The company continues to post top-end growth in a tough sector. It has been strategic with its store openings and focus on boosting its e-commerce offerings. Shares are still trading at the low end of its 52-week range.
I like Canada Goose’s margins to pick up in the last three quarters of this fiscal year.
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