Canada Goose Holdings, Inc. reported a slightly wider loss in the fiscal first quarter ended July 2 despite 21 percent sales growth. Both sales and earnings topped guidance, and the outerwear maker reiterated its outlook for its fiscal year.

All amounts are in Canadian dollars.

Total revenue of $84.8 million topped company guidance in the range of $70 million to $80 million. Adjusted EBIT of $(91.1) million was ahead of guidance in the range of $(115) million to $(105) million. EPS of $(0.70) per basic share compared with guidance between $(0.89) to $(0.82).

“We had a strong start to the year, with first quarter results reflecting solid demand for our brand, especially as more customers shop directly with us,” said Dani Reiss, chairman and CEO of Canada Goose. “We remain focused on our growth pillars to drive results over the long term. In the first quarter, we welcomed more new customers across every market into our expanding global retail network, and we continued to see product categories like apparel and accessories resonate with our customers.”

First Quarter Fiscal 2024 Financial Highlights
Total revenue increased 21 percent to $84.8 million compared to the prior year, up 18 percent on a constant currency basis.

DTC revenue grew 60 percent or 54 percent on a constant currency basis, driven by the growth of in-store retail sales. Sales from DTC channels increased as part of the total revenue mix to 66 percent from 50 percent in the same reporting period last year. DTC comparable sales1 increased 28 percent year-over-year.

Wholesale revenue decreased by 18 percent or 19 percent on a constant-currency basis, consistent with expectations, due to the continued streamlining of wholesale relationships as Canada Goose optimizes for greater DTC sales within its channel mix, partially offset by earlier shipments of orders to wholesale customers.

Revenue grew by 24 percent in North America, 52 percent in Asia Pacific, and was down 7 percent in EMEA. The decrease in EMEA revenue year-over-year was primarily due to the decline in wholesale revenue, which was in line with expectations, partially offset by an increase in DTC revenue.

Gross profit grew 29 percent to $55.2 million, compared to the prior year. Gross margin for the quarter expanded to 65.1 percent compared to 61.1 percent in the first quarter of fiscal 2023, primarily due to a higher mix of DTC channel sales, pricing, and favorable product mix from the sale of higher margin styles within heavyweight down and non-heavyweight ∂own categories, partially offset by higher products costs due to higher input cost inflation.

Selling, general and administrative (SG&A) expenses were $154.9 million, compared to $124.9 million in the comparable period last year. The increase in SG&A was primarily due to investments in initiatives to improve long-term operational efficiency through its Transformation Program and new store openings, including the annualization of store openings in fiscal 2023.

Operating loss was $(99.7) million, compared to $(82.2) million in the first quarter of fiscal 2023. The increase in operating loss was attributable to higher SG&A costs, partially offset by higher gross profit.

Adjusted EBIT was $(91.1) million, compared to $(75.9) million in the first quarter of fiscal 2023.

Net loss was $(85.0) million, or $(0.78) per basic share, compared with a net loss of $(63.6) million, or $(0.59) per basic share for the first quarter of fiscal 2023.

Adjusted net loss was $(73.1) million, or $(0.70) per basic share, compared with an adjusted net loss of $(58.8) million, or $(0.56) per basic share for the first quarter of fiscal 2023.

Balance Sheet Highlights
Inventory was $522.1 million for the first quarter ended July 2, 2023, up 3 percent from the first quarter ended July 3, 2022, with decelerating year-over-year growth compared to the fourth quarter of fiscal 2023. This was due to closer alignment between supply and anticipated demand and moving greater production to its own facilities.

During the first quarter of fiscal 2024, the company repurchased 1,156,959 subordinate voting shares for a total cash consideration of $26.3 million, ending the quarter with a cash balance of $48.0 million, compared with $81.8 million first quarter ended July 3, 2022.

Fiscal 2024 Full Year and Q2 Outlook

  • Total revenue of $1.4 billion to $1.5 billion;
  • Non-IFRS adjusted EBIT of $210 million to $240 million, representing a margin of 15 percent to 16 percent; and
  • Non-IFRS adjusted net income per diluted share of $1.20 to $1.48.

For the second quarter of fiscal 2023, Canada Goose expects:

  • Total revenue of $270m to $290 million;
  • Non-IFRS EBIT loss of $(30) million to $(20) million;
  • Non-IFRS adjusted net loss per basic share of $(0.24) to $(0.17).

Photo courtesy Canada Goose