Canada Goose, which is forecasting 18 to 27 percent revenue growth to C$1.3 to C$1.4 billion (€893.1m-€961.8m) this financial year ending in April 2023, intends to grow its Direct to Consumer business for the 12 months in the low to high teens on a comparable basis. If that objective is met, largely through the opening of 13 stores in various global locales, DTC will represent 70 to 73 percent of the company’s total annual revenues.
In the fourth quarter ended April 3, total revenues rose 6.8 percent to C$223.1 million (€151.1m) from C$208.8 million as DTC sales increased 8 percent to C$185.4 million (€130.5m) and wholesale improved 3.5 percent to C$35.1 million (€24.7m). North America was the biggest driver of sales, followed by the U.K. There were softer local and international traffic trends in Europe, and store closures in mainland China impacted softer sales in Asia-Pacific. Operating income slid 87.5 percent to C$900,000 from C$7.2 million, negatively impacted by C$7.7 million in annual impairment losses for non-financial retail assets and C$2.0 million in legal expenses related to class action lawsuits and rent abatements. Adjusted Ebit margin improved to 5.6 percent from 2.3 percent as the gross margin increased 2.7 percentage points to 69.1 percent. The reported net loss was C$9.1 million (€6.4m) against a profit of C$2.5 million.
For the full financial year, Canada Goose’s operating income increased 33.9 percent to C$156.7 million (€107.7m) from C$117.0 million as total revenues grew 21.5 percent to C$1,098.5 million (€754.6m) from C$903.7 million to surpass the C$1 billion mark for the first time. Approximately two-thirds of sales, or C$740 million (€508.4m), were Net income increased nearly 35 percent to C$94.6 million (€65.0m) from C$70.3 million. The annual gross margin grew to 66.8 percent from 61.3 percent.
The company sees two Asia-Pacific markets as significant sales contributors in the financial year 2023, South Korea and Japan. Canada Goose calls South Korea “a major untapped market” with considerable size and fashion influence. The distributor model market is moving forward with Lotte Group, the multinational conglomerate. Sazaby League Ltd., a longtime Canada Goose partner, struck a joint venture partnership for Japan with the company in March. The JV is being counted on to generate C$60 to C$65 million (€41.2m to €44.7m) in sales this FY, which would approximately double Japan’s sales total in FY22.
