Higher direct-to-consumer revenues coupled with the absence of pandemic-related restrictions helped Canada Goose achieve double-digit revenue growth in the EMEA and Asia-Pacific regions in Q4 ended April 2. Period operating income was C$17.2 million (€11.9m) versus C$0.9 million, but the group reported a net loss of C$10.0 million (€6.9m) against a loss of C$9.1 million on higher interest and finance expenses. Gross margin fell by 420 basis points to 64.9 percent from 69.1 percent due to higher obsolete raw materials, rising product costs and the unfavorable impact of an inventory value adjustment related to the company’s acquisition of its joint venture in Japan.
Fourth quarter total group revenues rose by 31 percent to C$293.2 million (€202.0m) as d-t-c sales increased by 23 percent to C$227.5 million (€156.7m) and wholesale lifted 30 percent higher to C$45.5 million (€31.4m). Regionally, EMEA sales, which includes the Latin America region, rose by 10.7 percent in constant currency to C$56.4 million (€38.9m) and Asia-Pacific sales improved by 45.9 percent year-over-year to C$114.1 million (€78.6m). Sales in the U.S. declined by 5.6 percent in constant currency to C$67.5 million (€46.5m) and C$55.2 million (€38.6m) in Canada.
The group is moving forward with its five-year strategic plan that was announced in mid-February. Canada Goose will more than double its retail base of 51 doors by the end of FY28 as the brand moves toward a greater focus on women and Gen-Z consumers. In FY24, 16 permanent store openings will target Mainland China, the U.S., and Japan. Meanwhile, an effort to create year-round relevance as a performance luxury lifestyle brand gained some traction in FY23 as non-heavyweight down sales represented 42.9 percent of all revenues versus 38.5 percent in the prior year. Canada Goose, eyeing accelerated growth in newer product categories such as rainwear and eventually eyewear and luggage, will debut in the sneaker category this summer.
Canada Goose’s current FY24 outlook calls for a total revenue range of C$1.4 to $1.5 billion with 75 percent of the total generated in H2, a wholesale revenue decline of 6 percent as it reduces its wholesale door count by 6 percent, and adjusted Ebit of C$210 to C$240 million that represents a 15 to 16 percent margin.
Full-year FY23 group results showed a 21 percent drop in annual Ebit to C$93.5 million (€64.4m) and a 320-basis point decline in operating margin to 11.1 percent from 14.3 percent. Annual gross margin improved by 20 basis points to 67.0 percent from 66.8 percent. Annual revenues rose 10.8 percent to C$1,217.0 million (€838.6m) from C$1,098.4 million.
