Robust revenue growth and gross margin expansion were unable to prevent a wider, year-over-year Q1 operating loss at Canada Goose. The group operating loss was C$158.7 million (€100.3m) against an operating loss of €96.9 million for the period ended June 29. The net loss was C$125.5 million (€79.1m) as the gross margin improved by 170 basis points to 61.4 percent.
Total revenues expanded by 22 percent year-over-year to C$107.8 million (€67.9m) as Direct-to-Consumer sales increased by 23 percent to C$78 million (€49.2m) and wholesale revenues improved by 11 percent to C$17.9 million (€11.3m). Sales were particularly strong in North America and Greater China, rising by 19 percent and 27 percent, respectively, to C$13.0m (€8.2m) and C$51.3 million (€32.3m).
In the EMEA, year-over-year sales fell by 3.6 percent to C$17.5 million (€11.0m) because of a planned drop in wholesale revenues, which were partially offset by higher DTC sales. DTC comparable sales growth dipped by low single digits, reflecting a “consumer under pressure” in the UK and a stronger business across Continental Europe. The company says it’s focusing on conversion and brand marketing to help mitigate some of the macro factors weighing on the performance in the EMEA.
Group senior management has told analysts that the company intends to continue investing in marketing and store operations as it maintains a watchful eye on potential tariff impacts. There will be an unspecified number of new stores. Canada Goose is paying modestly higher tariffs on European products, but they are projected to have a minimal financial impact.
