Canada Goose loss deepens as coronavirus shutters stores
Sales plunged 63% year-over-year
Canada Goose Holdings Inc. is prioritizing e-commerce after its loss in the three months through June widened as COVID-19 shut stores and slashed operating hours.
The Toronto-based outerwear manufacturer lost C$50.1 million ($37.7 million), or an adjusted 35 cents per share, as revenue fell 63% from a year ago to C$26.1 million in the first quarter of its 2021 budget year. Wall Street analysts surveyed by Refinitiv were expecting a loss of 40 cents per share on revenue of C$21.9 million.
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“Adversity demands change, drives innovation and reveals winners. For Canada Goose, that has never been more true than today, as we begin to see signs of recovery around the world, heading into our most important season,” CEO Dani Reiss said in a statement. “Where we face uncertainty, we have practiced discipline and flexibility, and where we see opportunity, we have accelerated our strategic plans.”
The company bolstered its direct-to-consumer strategy, increasing investment in e-commerce, and will concentrate its store openings in mainland China, where business appears to be recovering at a faster pace from COVID-19 induced shutdowns. Four new stores that opened in Chengdu in June have outpaced company expectations.
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Manufacturing of Canada Goose’s signature down-filled jackets has restarted for the fall/winter season on a limited basis and is expected to be one-third of last year's. The company will work to greatly reduce inventory by yearend. Canada Goose will continue to produce personal protective equipment to support frontline workers.
The company did not provide an outlook due to the uncertainty caused by COVID-19, but warned it expects lower wholesale revenue and a later shipment timing. The current quarter is expected to be the low point for online purchases due to seasonality, but preparations for the holiday season are on track.
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Canada Goose shares dropped 32% this year through Monday, trailing the S&P 500’s 4.01% gain.