Shares of Canada Goose Holdings (TSX:GOOS) jumped 19% after the parka maker posted better-than-expected earnings for the quarter that ended September 26 and raised its full-year guidance.
The stock closed trading Friday (November 5) at $60.14 per share, a one-day increase of 19%, and is now near its 52-week high of $62.57.
Canada Goose also raised its full-year forecast to a range of $1.17 to $1.33 in earnings per share (EPS), higher than analysts’ forecasts of $1.16.
The Toronto-based company posted earnings per share of $0.12 for its fiscal second quarter, while analysts had expected a loss of $0.10 per share. Revenue came in at $232.9 million, also beating forecasts.
Supply-chain bottlenecks that are slowing the global economy aren’t affecting Canada Goose, the company said.
Canada Goose is in the midst of a strategic shift to rely less on third-party sellers, disrupting its business patterns as consumers tend to buy its parkas closer to the winter months. Still, revenue from wholesalers was up 25% from last year, when the pandemic led them to delay orders.
In China, where Canada Goose has added several stores this year, direct sales climbed 86%. A Shanghai’s market regulator’s fine for allegedly misleading consumers appears to have had little effect on the Goose brand’s appeal within China.
Margins at its flagship stores and on the website slipped, in part because of the end of government wage subsidies linked to the COVID-19 crisis. Some price increases helped boost gross margins with wholesalers.
The brand has been expanding its product lines, most recently with its first footwear collection, which it will roll out next week. Soccer star David Beckham’s son Romeo is one of the celebrities hired to promote the new line of shoes.
