Canada Goose, confirming it has not seen any signs of slowing demand for its products, reported 24.2 percent revenue growth to 69.9 million Canadian dollars (€51.4m) from C$56.3 million in its first quarter. The Q1 operating loss widened by nearly 31 percent to C$80.7 million (€59.4m) from C$61.8 million, but the gross margin increased to 61.1 percent from 54.5 percent on pricing and lower product costs related to production efficiencies. The Q1 net loss attributable to shareholders widened 8.5 percent to a loss of C$62.4 million (-€45.9m) from €57.5 million.
All three segments posted double-digit revenue gains for the period ended July 3, led by a 27 percent increase in wholesale revenues to C$33.2 million (€24.3m). Direct-to-consumer (DTC) sales increased by nearly 20 percent to C$34.8 million (€26.6m), and Other revenues rose by 73 percent to C$1.9 million (€1.4m).
By region, EMEA sales were up 37 percent to C$20.2 million (€14.9m) on retail store expansion and from doors that were closed in the year-ago quarter due to pandemic restrictions. The regional sales recovery after the pandemic varies by market, according to Canada Goose. France has shown the strongest signs of improvement. In the U.K. and Germany, where the brand has the highest concentration of stores, tourism is said to be recovering slowly. Canada Goose opened six stores in the EMEA during the pandemic, and these doors are now finally gaining some traction.
In the U.S., Q2 revenues were up by almost 69 percent to C$15.7 million (€11.6m). Asia Pacific quarterly sales, meanwhile, fell by 28 percent to C$16.1 million (€11.8m) as eight of 16 stores in mainland China were closed for periods of time due to Covid-19 restrictions. The company intends to open four new stores in China this fall, including one in the Hisense Plaza in Qingdao. Meanwhile, the revenue contribution from Japan was minimal in Q2 as responsibility for the market is shifting to a previously announced joint venture with Sazaby League, Ltd. that will account for more revenues in Japan later this year. Canada Goose says it envisions multiple new stores opening in Korea and Japan over the next 3 to 5 years, which will help drive DTC growth in APAC.
During Q1, lightweight down sales increased more than 90 percent year-over-year to represent about 40 percent of Q1 DTC revenues, and non-heavy weight down accounted for approximately 60 percent of total Q1 revenues. Through its initiative to focus more on products for female consumers, Canada Goose will introduce a new collection next month that is described as combining the style, performance and versatility women are looking for through new silhouettes combined with elevated fabrics and trims.
The company’s current FY23 outlook calls for total revenues of C$1.3 to C$1.4 billion and an adjusted EBIT range of C$250 to $C290 million, which translates into an operating margin range of 19.2 to 20.7 percent. The outlook is based on a number of assumptions, including improved store traffic and fewer operational disruptions, including mandatory closures, globally.
