Projections for both profit and revenue growth were dragged down by sagging customer traffic in China, where the government has curbed some travel and residents are limiting their time in public settings to avoid exposure to the virus, which has infected 28,000 people and caused more than 500 deaths.
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Canada Goose now says full-year profit may drop 2.2 percent, implying earnings of $1.33 a share, down from a previous projection of 25 percent growth. It projects annual revenue will widen just 13.8 percent to 15 percent, implying sales of $945 million to $955 million, down from 20 percent.
“Retail stores and e-commerce across Greater China have and continue to experience significant reductions in revenue,” Canada Goose said in a statement.
“Due to global travel disruptions, retail stores in international shopping destinations in North America and Europe are also affected," though the supply chain hasn't been interrupted, executives said.
The revised outlook overshadows what was a better-than-expected fiscal third quarter, boosted by strong winter coat demand in Asia. Revenue in the region more than doubled to $94.7 million from $46.4 million.
Earnings in Canada Goose’s fiscal third quarter, the three months through December, rose 14 percent from a year ago to $118 million, or $1.07 a share. Excluding costs from the purchase of boot-maker Baffin and currency-exchange fluctuations, the company earned an adjusted $1.08 a share, edging out a $1.07 estimate from analysts surveyed by Refinitiv.
Total revenue climbed 13.2 percent year-over-year to $452.1 million, beating the average estimate of $448 million from Wall Street.
Canada Goose shares fell 6.1 percent this year through Thursday, lagging the S&P 500’s 3.6 percent gain.