Canada Goose Cuts FY 2022 Forecast; Shares Dip

Canada Goose Holdings (TSE: GOOS) (NYSE: GOOS) cut its full-year revenue and profit forecast on Thursday as Omicron restrictions dampen demand for the company’s parkas and luxury footwear.

Revenue & Earnings 

Revenue for Q3 2022 came in at C$586.1 million, an increase of 26.5% from C$474 million. Global e-commerce revenue rose 28.1%. 

DTC revenue rose 48.8% to C$445.4 million, driven by higher sales from existing retail stores, e-commerce growth, and store openings. DTC revenue in Mainland China increased by 35.1%. 

Wholesale revenue decreased 15% to C$136.7 million due to an earlier shipment timing relative to fiscal 2021. 

Net income amounted to C$151.9 million (C$1.41 per diluted share) in Q3 2022, compared to C$107 million (C$0.96 per diluted share) in Q3 2021. 

Non-IRFS adjusted net income was C$152.6 million (C$1.42 per diluted share) in the quarter, up from C$111.9 million (C$1.01 per diluted share) a year ago.  

The Toronto-based company now expects revenue for fiscal 2022 to be between C$1.090 billion and C$1.105 billion, down from an earlier estimate of between C$1.125 billion and C$1.175 billion.

Canada Goose expects adjusted earnings for fiscal 2022 to be between C$1.02 and C$1.11 per share, down from its previous guidance of between C$1.17 and C$1.33.

CEO Commentary

Canada Goose president and CEO Dani Reiss said, “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. We remain confident in our long-term trajectory for revenue growth and margin expansion, notwithstanding the emergence of temporary and unexpected COVID-19 disruptions in certain markets.”

Wall Street’s Take

Two days ago, Evercore ISI analyst Omar Saad kept a Buy rating on GOOS with a price target of C$88.78. This implies 140% upside potential. 

The rest of the Street is bullish on GOOS with a Strong Buy consensus rating based on six Buys and two Holds. The average Canada Goose price target of C$65.30 implies upside potential of 76.5% to current levels.  

TipRanks’ Smart Score 

GOOS scores an 8 out of 10 on the TipRanks Smart Score rating system, indicating that the stock returns should beat the overall market. 

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