By
Bloomberg
Published
May 16, 2024
High-end coat maker Canada Goose Holdings Inc. reported higher-than-expected sales growth on strong retail results in China and the US. The shares jumped more than 12% in early trading in New York.
The Toronto-based company reported revenue of C$358 million ($263 million) for the fiscal fourth quarter ended March 31, compared with the average analyst estimate of C$316 million.
Sales grew 22% from a year earlier.
The company, which sells parkas that cost as much as $2,000, has focused on improving performance in Asia. The region is home to over 40% of Canada Goose stores and recovery there from the Covid pandemic has been slow. The company has also been opening more locations, added three new permanent stores in the fourth quarter.
Canada Goose issued a new outlook that sees slow growth in revenue but higher profitability in fiscal 2025. The company expects sales to grow in the low single digits compared with 2024 as it continues its shift away from the wholesale business to focus on selling products directly to consumers.
But it plans to increase prices, and margins should expand, the company said, projecting that adjusted profit per share will grow “by a mid-teen percentage” over a year ago.
The outlook “assumes global consumer spending will continue to be pressured amid persistently high interest rates and geopolitical uncertainty,” the company said in a statement. “Within our business, we assume continued operational discipline and execution of initiatives focused on delivering further cost efficiencies.”
Sales increased about 30% in greater China and nearly 25% in North America in the fourth quarter compared with the same period a year earlier.
Canada Goose shares had dropped 3.6% so far this year through Wednesday’s close.