Robust online sales globally returned Canada Goose to growth in its third fiscal quarter. Revenues for the three months ended Dec. 27, 2020, progressed by 5.0 percent to 474.0 million Canadian dollars (€309.5m-$363.8m). E-commerce was a bright spot, surging by 39.3 percent, which partly offset store closures of 30 to 35 trading days in its top-performing Canadian and European stores.
Direct-to-consumer (DTC) revenues inched down to C$299.4 million (€195.4m-$234.1m) from C$301.8 million for the year-ago quarter, despite the expansion of e-commerce and the addition of two more stores in Mainland China, which were offset by lower retail revenues due to Covid-19 disruptions globally. In the U.K., sales nearly doubled. A 42 percent gain was recorded in sales by the company’s brick-and-mortar stores in China.
Wholesale revenues rose by 11.1 percent to C$160.8 million (€5.6m-$6.5m), partly becaise of later shipments resulting from in-season requests from partners and international distributors. Meanwhile, personal protective equipment sales sent the Other segment’s sales up by 176.0 percent to C$13.8 million (€9.0m-$10.8m).
Overall, the gross margin inched up by 0.8 percentage points to 66.8 percent, with an increase of 2.8 percent in the DTC gross margin to 77.9 percent, thanks to higher pricing and a favorable geographic mix. A gain of 3.0 percentage points in the wholesale gross margin to 51.5 percent was attributed to higher pricing and better volumes, led by parkas.
Overall, the operating margin fell by 3.4 percentage points to 32.3 percent, because of lower retail profitability from Covid-19 disruptions, while net income dropped by 7 percent to C$107.0 million (€69.8m-$82.1m).
The company withheld guidance for fiscal 2021, citing prevailing global uncertainties, but said it is encouraged by its strong momentum as it finishes the fiscal year. However, seven of its 28 owned retail stores remain closed over pandemic restrictions. In a conference call, the management said that wholesale is expected to see a low double-digit drop in the current quarter, which should be mitigated by e-commerce.
The company plans to continue expanding its retail footprint in Mainland China in tier 1 and tier 2 cities. It added that it is still on track to unveil a footwear range, due out in the autumn.