Canada Goose Slips 4% On Depressed 2Q Sales Outlook

Shares of Canada Goose Holdings are falling over 4% as the outwear maker expects a significant decline in 2Q revenues, due to the negative impact of the COVID-19.

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Canada Goose (GOOS) reported a smaller-than-expected 1Q loss of C$0.35 per share versus analysts’ expectations of a loss of C$0.42 per share. Meanwhile, its revenues of C$26.1 million came ahead of Street estimates of C$20.5 million. The company’s 2Q loss widened from a year-ago loss of C$0.21 per share, while revenues declined over 63% year-over-year, due to temporary store closures and reduced store hours amid the COVID-19 pandemic.

The company’s CEO Dani Reiss said: “New openings this year will be concentrated in mainland China, where the recovery of traffic remains ahead of other markets. With international tourism now heavily constrained, serving the world’s largest luxury consumer base at home is increasingly crucial.”

Ahead of the 1Q results, Susquehanna analyst Sam Poser reiterated a Buy rating on the stock and had set a price target of $31.40 (30.9% upside potential). Poser noted that “Canada Goose remains one of the best managed, most authentic brands in the market, and we remain confident that the company will emerge from the current pandemic much stronger than it was when the crisis started.” He added that “The long-term outlook for Canada Goose continues to improve throughout the current crisis.”

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 7 Buys, 2 Holds, and 1 Sell. The average price target of $28.72 implies an upside potential of about 20%. (See GOOS stock analysis on TipRanks).