Clothing retailer Canada Goose (TSE:GOOS) (GOOS) pulled off a win with its latest earnings report, though investors didn’t exactly take the news well. In fact, they hauled stakes and headed for the door in an outright migration, taking over 4.5% of the company’s market cap with them in Thursday morning’s trading session.
Canada Goose turned in a win, of sorts, in the earnings report, posting revenue of C$88.1 million. That represented a 3.3% gain and beat estimates of C$86.1 million. In addition, Canada Goose posted a loss of C$0.79 per share, but that was actually better news than expected, as analysts were looking for a loss of C$0.80 per share.
China proved to be the biggest winner for Canada Goose, as the luxury market in China is still holding up, thanks possibly to the sheer bulk of its population. Even a declining luxury market in China is still a lot larger than luxury markets almost anywhere else; after all, China has roughly four times the population of the United States.
A Market of Declining Choice
While on the surface, these don’t look like the best of times for retailers in general, there is one silver lining: a declining market of choice. While many retailers were experimenting with paring back product lines in a bid to focus better and cut costs, that trend has picked up lately. Canada Goose is no different.
It has been aggressively focusing its efforts on a relatively small number of items. It has also been working to bring out a line of products for warmer weather, which lets it branch out into different seasons instead of focusing exclusively on winter. That means more revenue streams and, hopefully, better results overall.
Is Canada Goose Stock a Buy?
Turning to Wall Street, analysts have a Hold consensus rating on GOOS stock based on one Buy, 10 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 33.77% loss in its share price over the past year, the average GOOS price target of C$17.86 per share implies 18.69% upside potential.
