[ad_1]
Canada Goose Holdings has come upon something of a rough patch — at least on Wall Street.
Its stock is at its lowest point since the luxury parka-maker’s 2017 IPO, analysts are worrying over everything from China to warmer weather to brand heat and, on Wednesday, the company cut its outlook for the year.
But Dani Reiss, who launched the business founded by his grandfather onto the global stage and now leads it as chairman and chief executive officer, is as bullish as ever — and sticking all the more to his brand-first ethos.
“The story that is most important this quarter to me is about the strong traffic we had in our stores and that really speaks to the strength of the brand,” Reiss told WWD in an interview on the company’s second-quarter results.
“We’re focused on building a world-class luxury brand,” he said. “Such a brand has never existed out of Canada before. The kind of authenticity that we have is very rare in brands outside of Europe, frankly, and we continue to lean into that.”
Reiss was also clear eyed about the challenges in the market.
“Sure it’s been difficult to navigate the last few years of COVID-19 and lockdowns and now economic pressures and macro conditions that are affecting everybody, but I think that we’ve been navigating them well,” Reiss said. “People are more conservative these days. They’re buying closer to need, that’s obvious. Interest rates are up. Inflation is up. And people are a little nervous. We need to watch it.”
The company’s second-quarter net income slipped 18 percent to 4.1 million Canadian dollars, while adjusted earnings fell 20.2 percent to 16.2 million Canadian dollars.
Revenues for three months ended Oct. 1 increased 1.4 percent to 281.1 million Canadian dollars. (At current exchange, 1 Canadian dollar is worth 72 cents in the U.S.)
The company said the momentum that gathered earlier in the quarter “began to slow noticeably in September,” causing it to pull back on its outlook.
Revenues this year are now slated to come in at 1.2 billion to 1.4 billion Canadian dollars, down from the 1.4 billion to 1.5 billion Canadian dollars projected earlier.
And adjusted earnings per share are seen coming in at 0.60 to 1.40 Canadian dollars, moving the range down from the 1.20 to 1.48 Canadian dollars forecast before.
Shares of the company fell as much as 11.6 percent to $9.81 on the New York Stock Exchange — a new low for the stock.
Reiss said Canada Goose has an opportunity to take the traffic gains at its stores and convert them to improved sales.
Direct-to-consumer channels accounted for 39 percent of total sales in the second quarter, up from 34 percent a year earlier. For the year overall, DTC is expected to account for about 70 percent of the company’s top line.
Six new stores were added during the quarter, for a total of 62, and 15 additional doors are slated to open in the second half, with the new locations concentrated in mainland China and the U.S.
DTC comparable sales were down 7 percent, with a slight gain in brick-and-mortar sales offset by declines online.
While more people are coming into Canada Goose stores, the company has also become choosier about its wholesale distribution.
“I think we have a great balance,” Reiss said. “We used to be entirely wholesale. We want to be with like-minded wholesale partners that are brand enhancing, that want to build the brand and tell our story. Some of them are larger stores and some of them are smaller, trend-setting and taste-making stores.
“We are an authentic brand,” he said. “We tell stories about real people and real things and it’s super important to be in an environment where we are able to do that.”
Wholesale revenues decreased 10 percent given a planned streamlining of wholesale accounts and earlier shipments to some customers.
The pullback led North American sales to a 7 percent decline, while Europe, the Middle East and Africa was up 6 percent and the Asia Pacific region was up 13 percent.
Just after the quarter ended, Canada Goose celebrated the fifth anniversary of its first brick-and-mortar store in China, where it now has 21 permanent outposts.
But the luxe market in China has been under the microscope since LVMH Moët Hennessy Louis Vuitton reported an overall gain of just 1 percent in third-quarter revenues.
[ad_2]
Source link