Canada Goose Holdings Inc. reported a slightly higher loss in the first quarter ended June 27. Revenues vaulted 115.7 percent.

“Canada Goose is off to a great start in the first quarter,” said Dani Reiss, president and CEO. “Our digital business continued at a rapid pace of growth globally alongside improving retail trends. With strong momentum in a less disrupted operating environment and an exciting product pipeline. including our growing apparel business and footwear launch later this fall, we are well-positioned for fiscal 2022.”

Figures are in Canadian dollars.

First Quarter Fiscal 2022 Business Highlights
(compared to First Quarter Fiscal 2021)

  • Global e-commerce revenue increased by 80.8 percent;
  • Revenue increased significantly in all geographic regions;
  • Despite elevated retail closures, Canada grew by 126.1 percent, excluding $7.0 million of temporary PPE sales in the comparative quarter; and
  • DTC revenue in Mainland China increased by 188.7 percent.

The adjusted loss per share of 45 cents came out ahead of Wall Street’s consensus estimate of a loss of 55 cents. Revenues of $56.3 million topped Wall Street’s consensus target of $51.3 million.

First Quarter Fiscal 2022 Results
(compared to First Quarter Fiscal 2021)

  • Total revenue was $56.3 million from $26.1 million.
  • DTC revenue was $29.4 million from $10.4 million. The increase was driven by a lower level of COVID-19 disruptions, e-commerce growth and new retail expansion, despite continued store traffic headwinds.
  • Across its global store network, approximately 20 percent of total trading days were lost to temporary closures.
  • Wholesale revenue was $25.8 million from $8.7 million. The increase was a result of the higher volume of shipments to wholesale and international distributor partners driven by a lower level of COVID-19 disruptions.
  • Other revenue was $1.1 million from $7.0 million. The decrease was attributable to PPE sales in the comparative quarter, which was temporarily manufactured in support of COVID-19 response efforts.
  • Gross profit was $30.7 million, a gross margin of 54.5 percent, compared to $4.8 million and 18.4 percent.
  • DTC gross margin of 72.8 percent, compared to 66.3 percent (normalized from 82.7 percent as reported, adjusted for the impact of a $1.7 million duty recovery related to shipments to Asia in the comparative quarter which did not reoccur). The increase was driven by the favorable benefit of higher sales volume from retail stores of $17.5 million (+530 bps) and lower inventory provisions of $0.2 million (+70 bps).
  • Wholesale gross margin of 35.3 percent, compared to 17.2 percent. The increase was driven by the favorable impact of a higher proportion of sales to our wholesale partners compared to international distributors of $10.6 million (+1,470 bps).
  • Other segment gross profit was $0.2 million from a gross loss of $5.3 million.
  • Operating loss was $60.7 million compared to a loss of $59.3 million.
  • DTC operating loss of $9.1 million compared to a loss of $12.2 million. The decrease in operating loss was attributable to a lower level of COVID-19 disruptions and the positive impact of e-commerce growth.
  • Wholesale operating income of $0.2 million, compared to operating loss of $7.2 million. The increase in operating income was attributable to a higher segment revenue and gross profit.
  • Other operating loss was $51.8 million from a loss of $39.9 million. The increase in operating loss was attributable to $3.6 million of incremental investment in marketing and strategic initiatives, $3.1 million of higher performance-based compensation, and $3.7 million of unfavorable foreign exchange fluctuations.
  • Net loss was $56.7 million, or 51 cents per diluted share, compared to $50.1 million, or 46 cents per diluted share.
  • Non-IFRS adjusted EBIT was a loss of $60.2 million compared to $46.5 million.
  • Non-IFRS adjusted net loss was $50.0 million, or 45 cents per diluted share, compared to a loss of $38.4 million, or 35 cents per diluted share.
  • Cash was $305.9 million as at quarter-end, compared to $160.1 million, alongside $313.7m of available borrowing capacity in the undrawn revolving facility.
  • Inventory was $404.5 million as at quarter-end, compared to $428.6 million. The decrease was attributable to a reduction in finished goods of $22.4 million, supported by sales growth and reduced production in fiscal 2021.

Fiscal 2022 Outlook

The company reiterates the fiscal 2022 outlook which was issued on May 13, 2021, in the press release announcing results for fiscal 2021, on the basis of a gradual and progressive improvement in the COVID-19 landscape. For the second quarter of fiscal 2022, this outlook assumes low double digit wholesale revenue growth, and DTC revenue at roughly one and a half times last year’s level.

Photo courtesy Canada Goose