Advertisement

Canada Goose Boosts Sales, Taps Jimmy Choo Exec but Disappoints Wall Street

Canada Goose Boosts Sales, Taps Jimmy Choo Exec but Disappoints Wall Street
From WWD - February 8, 2018

Canada Goose is still growing sales by double digits, and has a new executive coming in from Jimmy Choo, but its not enough for Wall Street.Shares of the company, which went public less than a year ago, fell 17.6 percent to 31.40 Canadian dollars after posting revenue of 265.8 million Canadian dollars, a 27.2 percent increase, for the third fiscal quarter. Net income also grew to 62.9 million Canadian dollars, compared to $39.1 million a year ago.The company also revealed that Jonathan Sinclair, currently chief financial officer and executive vice president of Jimmy Choo, which was acquired last year by Michael Kors, is set to join Canada Goose as cfo midyear. Canada Gooses cfo for nearly five years, John Black, is set to retire at the end of the year.Chief executive officer Dani Reiss highlighted Sinclairs experience in luxury during a call with analysts, and said hes looking forward to having him on my side, going forward, as a strategic business partner.But analysts did not seem interested in the prospect of the brand upping its luxury quotient and instead focused on a quarter that, while impressive by any account, fell short of their hopes.Ike Boruchow of Wells Fargo admitted in a note that all of the companys stats for the quarter were good and that Canada Goose overall continues to illustrate the best growth potential in our coverage universe, but said the stock drop is coming from investors lofty expectations.Sales were not as strong as many bulls had been hoping for, he said, noting there had been talk of revenue in the $300 million range.Partly because of this, Boruchow said the brands stock had seen a material rally since November leading to an expectation for a much more material beat and hope for a raise [in guidance]. Yesterday, the companys stock closed at an all-time high of 38.12 canadian dollars.Brian Tunick of RBC Capital Markets agreed, and said expectations for a blow-out were driving the shares.As for quarterly guidance, chief executive officer Dani Reiss reiterated during a call with analysts that the company will only be updating on a yearly basis, something the company has not been consistent with. In reporting its second-quarter results in November, Canada Goose increased its full-year guidance to 25 percent revenue growth, after posting a 34.7 percent rise in sales for that quarter.Even though investors seem to have a not good enough view of the brand, Reiss said his company delivered on all fronts during the third quarter, which covers fall, most of winter and the holidays, making it the most important for a brand that sells down coats and now a small line of knits.In fact, we have delivered results that have exceeded expectations for each of the last four quarters and that is something we are all extremely proud of, he added. I see this as a powerful validation of our brand and our ability to deliver on our strategy.Growth is coming from the continued expansion of its product offering, including different styles of its core parka, but also its lightweight line and now childrens wear, and also expansion abroad. Canada Goose now operates online in 87 countries, has seven retail stores in Europe and has set plans to expand in China.We continue to see enormous demand in that market, Reiss said. Recently, we have launched a small cross-border online pilot and we are excited to see how that performs. And of course, we will make any other material announcements about our China strategy when the time is right.For More, See:

Coty Acquisitions Drive Sales

Kors Ups Guidance After Q3 Beat

Levi Strauss Gets International Boost

Advertisement

Continue reading at WWD »