Canada Goose Holdings Inc. reported profits in the third quarter ended December 31 climbed 60.9 percent as sales grew 27.2 percent.
“In our peak selling season, we delivered strong performance across geographies, channels and categories this quarter, reflecting the continued demand for the Canada Goose brand around the world. Year to date, we added e-commerce sites in seven new markets, opened five new stores across three continents, including our partner operated store in Tokyo and we successfully added more than 700 employees. As we look ahead, we continue to build deeper relationships with our fans and bring new people into the world of Canada Goose,” stated Dani Reiss, president and chief executive officer.
Fiscal 2018 Third Quarter Results (in Canadian dollars, compared to the same period in Fiscal 2017):
- Total revenue increased by $56.8 million from $209.1 million to $265.8 million in the third quarter of fiscal 2017, representing year-over-year growth of 27.2 percent.
- Wholesale revenue was $134.2 million as compared to $137.0 million in the third quarter of fiscal 2017. In the first half of fiscal 2018, we shipped approximately $18 million of customer orders that were originally planned for the third quarter based on the order book, which was enabled by efficiency in manufacturing and sales planning to allow us to accelerate our shipment timing in response to requests from retail partners approaching their peak selling season. This was partially offset by strong demand in the wholesale channel.
- Direct-to-consumer revenue was $131.6 million as compared to $72.0 million in the third quarter of fiscal 2017. The increase was primarily driven by incremental revenue from four new company-operated retail stores and seven additional new e-commerce sites, which opened in fiscal 2018. We experienced continued strong performances of our existing e-commerce sites and retail stores.
- Gross profit increased to $169.0 million from $120.3 million in the third quarter of fiscal 2017. As a percentage of total revenue, gross profit was 63.6 percent compared to 57.5 percent in the third quarter of fiscal 2017.
- Wholesale gross profit was $68.5 million, a gross margin of 51.0 percent, as compared to $65.5 million, a gross margin of 47.8 percent, in the third quarter of fiscal 2017. The increase in wholesale gross profit and higher gross margin were due to a greater proportion of wholesale revenue from higher margin parkas within our fall and winter line and lower material costs.
- Direct-to-consumer gross profit increased to $100.6 million, a gross margin of 76.4 percent from $54.8 million, a gross margin of 76.1 percent, in the third quarter of fiscal 2017. Lower material costs have a less significant impact on gross margin in our direct-to-consumer channel as a result of higher selling prices.
- Selling, general and administrative expenses were $76.8 million as compared to $62.0 million in the third quarter of fiscal 2017, driven by employee headcount increases and operational and selling expenditures to support the growth of our direct-to-consumer channel.
- Net income for the third quarter was $62.9 million, or $0.56 per diluted share, compared to net income of $39.1 million, or $0.38 per diluted share, in the third quarter of 2017.
- Adjusted EBITDA was $94.7 million compared to $66.1 million in the prior year, representing year-over-year growth of 43.2 percent.
- Adjusted net income per diluted share for the third quarter of fiscal 2018 was $0.58, based on 111.6 million diluted shares outstanding, compared to an adjusted net income per diluted share of $0.44, based on 101.8 million diluted shares outstanding in the third quarter of fiscal 2017. Adjusted pro forma net income per share for the third quarter of fiscal 2017, which includes the effect of the Initial Public Offering (“IPO”) in the calculation of the weighted average number of shares outstanding as if the IPO had occurred at the beginning of fiscal 2017, was $0.42 per share based on 106.3 million shares.
Photo courtesy Canada Goose