Canada Goose Holdings Inc.’s stock saw a significant surge of 12.6% early Thursday, following the luxury outerwear maker's optimistic outlook for 2024, which surpassed consensus estimates.

Strong Performance in Asia Pacific Region Drives Earnings Growth

Toronto-based company GOOS, known for its high-quality down jackets, delivered its fiscal third-quarter earnings that met expectations. Chief Executive Dani Reiss attributed the impressive earnings to robust growth in the Asia Pacific region, as revenue increased across various categories.

Record-Breaking Holiday Performance Drives Revenue

Despite the challenging consumer spending environment, Canada Goose had an exceptional holiday season. The company experienced record-breaking traffic levels and achieved strong revenue during key consumer moments. Particularly, during the long shopping weekend of Black Friday, store traffic reached an all-time high, resulting in revenue growth of over 40% compared to the previous year.

Financial Highlights for Q3 2024

During the quarter ending in December, Canada Goose reported net income of C$131.4 million ($97.7 million), or C$1.29 a share. This is a slight decrease from the net income of C$137.5 million, or C$1.28 a share, recorded during the same period last year. Nevertheless, adjusted per-share earnings matched the FactSet consensus at C$1.37.

Furthermore, revenue for the quarter rose to C$609.9 million from C$576.7 million a year ago, in line with FactSet's expected revenue of C$610.0 million.

Expectations for Q4 2024

For the fourth quarter, Canada Goose anticipates adjusted earnings per share between 2 cents and 13 cents, accompanied by sales ranging from C$310 million to C$330 million. The FactSet consensus estimates project earnings per share of 8 cents and sales of C$299 million.

Canada Goose Upgrades Fiscal 2024 Outlook

Canada Goose, the renowned outerwear brand, has raised its expectations for fiscal year 2024. The company now forecasts an adjusted EPS range of 82 cents to 92 cents, a notable increase from its previous guidance of 60 cents to C$1.40. Furthermore, it anticipates generating revenue between C$1.285 billion and C$1.305 billion, compared to the earlier projection of C$1.200 billion to C$1.400 billion.

According to the FactSet consensus, analysts expect EPS to reach 86 cents and revenue to hit C$1.279 billion.

Focus on Direct-to-Consumer Strategy and Wholesale Growth

One of Canada Goose's primary objectives is to enhance its direct-to-consumer revenue, which it aims to represent approximately 70% of its total revenue. As part of this strategy, the brand intends to control its wholesale door count, implement return policies with partners, revise re-order expectations, and expand its retail store network. To facilitate this expansion, Canada Goose plans to launch three permanent stores in the fourth quarter, increasing its network to a total of 68 stores.

Ethical Concerns Addressed

While the company faced criticism from animal-rights activists due to its utilization of feathers from geese and ducks, it has made significant strides in addressing these ethical concerns. In response to pressure from advocacy group PETA (People for the Ethical Treatment of Animals), Canada Goose pledged to eliminate fur from its products, resulting in the conclusion of a PETA campaign in 2021. Moreover, the brand adopted more eco-conscious practices, such as introducing the Standard Parka. This innovative product reduces carbon emissions by 30% and water usage during production by an impressive 65% in comparison to their Expedition Parka counterpart.

Stock Performance

Despite the positive updates, Canada Goose's stock price has experienced a steep decline of 51% over the past year. In contrast, the S&P 500 index has surged by 18.6% during the same period.

Canada Goose continues to redefine the outerwear market through their commitment to superior quality, sustainable practices, and an expanding retail presence. With a renewed fiscal outlook, the brand is poised for a successful future.