Increased demand for luxury goods in China contributed to a reported 62 percent increase in Asia-Pacific sales at Canada Goose to C$270.7 million (€186.3m) for the third quarter ended Dec. 31. All other geographies posted double-digit declines in sales, including a 26 percent decline in the EMEA to C$86.8 million (€59.7m) and a 14 percent drop in North America to C$252.4 million (€173.7m).
Overall, the group reported a 4 percent increase in Q3 operating income to C$198.8 million (€136.8m) and a 5.7 percent improvement in total revenues to C$609.9 million (€419.7m) from C$576.7 million in the year-ago period. Net income was down 4.4 percent to C131.4 million (€90.4m), but year-over-year gross margin was up 150 basis points to 73.7 percent due to pricing that was partially offset by higher product costs. Inventory at period end was essentially flat at C$478.4 million.
Canada Goose continues to see strong growth in DTC and softer wholesale revenues. DTC sales rose by 14 percent on a reported basis to C$514.0 million (€353.7m), while reported wholesale revenues slipped by 34 percent to C$81.8 million (€56.3m). The group built its DTC network to 65 locations at period end via an opening in the US and Kobe, Japan. Last month, an additional store was opened in China. Additionally, during Q3, Paola Confectii, a European luxury knitwear manufacturer, was acquired.
Simultaneous with the results, the company altered its FY24 revenue outlook to a range of C$1.285 to C$1.305 billion from prior guidance of C$1.2 to C$1.4 billion. Annual adjusted Ebit is now pegged at C$146 to $158 million, representing a margin of 11 to 12 percent against a prior margin outlook of 11 to 16 percent. DTC sales, as a percentage of revenues, are forecast to come in at about 70 percent for the FY. Meanwhile, wholesale revenue growth is forecast to fall by a high teens percentage year-over-year as Canada Goose continues to edit its door count within the channel.
