Canada Goose Holdings Inc. reported a smaller loss in the fiscal first quarter ended June 30 with the help of margin improvement and a 9 percent sales gain on a currency-neutral basis. On an analyst call, Dani Reiss, chairman and CEO, noted that the period marked the strongest first-quarter adjusted EBIT margin since fiscal 2020 while highlighting the progress the brand is making in selling products beyond outerwear.

Reiss said the sales gains in the quarter were driven by “strong demand for our expanding lifestyle product offering, including apparel, rainwear, and windwear.”

He added, “We also achieved healthy gross margin expansion in the season with a greater mix of spring/summer categories, while higher channel margins and disciplined cost management further supported profitability. Together, these results demonstrate that the strategic investments we have made over the past several years are translating into stronger financial performance as planned.”

The luxury outerwear maker maintained its guidance for the full fiscal year.

First-Quarter Results
(all figures are resented in Canadian (CN$) dollars)

In the quarter, sales increased 10.3 percent on a reported basis (+8.6 percent on a constant currency basis) to CN$118.9 million.

DTC revenue increased 8.6 percent (+6.7 percent on a constant currency basis) to CN$84.8 million, due to stronger performance in Asia Pacific and North America. DTC comparable sales declined 3.2 percent, primarily reflected softer store comparable sales, partially offset by double-digit e-commerce growth.

Wholesale revenue surged 66.5 percent (+65.4 percent on a constant currency basis)  to CN$29.8 million, driven by shipping a larger planned wholesale order book, stronger in-season orders from wholesale partners, and shipment timing.

Other revenue decreased 63.6 percent (-64.4 percent on a constant currency basis) to CN$4.3 million, as a result of minimal friends & family activity in the U.S. compared to the same prior year period.

The net loss for the period shrunk to CN$90.8 million, or 93 cents per share, from a net loss of CN$125.2 million, or CN$1.29, in the prior-year period. However, the improvement was largely tied to the non-recurrence of an arbitration award payment and an earn-out associated with its European knitwear manufacturer recognized in the prior year period.

The adjusted net loss was CN$86.5 million, or 89 cents, down from an adjusted net loss of CN$88.2 million, or 91 cents, a year ago. Adjusted EBIT was a loss of CN$103.8 million, compared to a loss of CN$106.4 million in the prior-year period.

Gross margin improved to 62.4 percent of net sales in Q1 from 61.4 percent in the first quarter of fiscal 2026, reflecting favorable channel mix and region mix. SG&A expenses were cut to CN$178.0 million, compared to CN$224.9 million in the prior-year period, reflecting the arbitration award payment and the European knitwear earn-out in the year-ago period.

Executive Commentary
On the call, Reiss elaborated on progress being made on three priorities that the brand had set to “continue strengthening our year-round relevance with consumers while driving sustainable growth and profitability.”

The first priority is driving strong consumer engagement. As part of that effort, Canada Goose rolled out Snow Goose spring capsule and Natural Intelligence summer collection brand campaigns to expand brand reach.

Reiss noted that brand desire strengthened in mainland China and continental Europe, supported by “compelling campaigns and elevated retail experiences.” He added, “While traffic across parts of our store network remained lower than we would have liked, largely reflecting a soft macro environment, we continue to see encouraging indicators of consumer interest, including strong e-commerce profit growth and healthy customer acquisitions.”

Canada Goose also continues to see desirability and awareness outperform competitive benchmarks in key markets. He added, “Together, these key indicators reinforce the strength of the brand and its ability to connect with both existing and with new consumers. Our focus remains on deepening consumer engagement within the brand and expanding our relevance across more seasons and occasions. As we continue to build demand in our spring/summer categories alongside strong engagement across established categories, we believe our planned increase in marketing investment through the second and third quarters positions us well to convert that growing interest into sales.”

The second priority is “drive greater year-round relevance.” Reiss said Canada Goose was “thrilled” by the response seen to the brand’s spring/summer collection, the largest in its history.  Said Reiss, “The assortment was met with exceptional customer demand across direct-to-consumer and wholesale, with apparel, which includes fleece knitwear, shirts, and bottoms, as well as rainwear and windwear, leading category growth and expanding their share of first quarter revenue.”

Apparel, rainwear, and windwear accounted for nearly 40 percent of Canada Goose’s sales in the first quarter. In fiscal 2022, these categories represented just 5 percent of the business and had only grown to 15 percent of its total revenue by fiscal 2026. Said Reiss, “What is notable is that this growth is additive. Down-filled outerwear also grew in the quarter. In addition to strong customer response to both newer and established categories. This demonstrates our ability to build a more balanced business throughout the year while remaining true to what makes Canada Goose distinctive, which we believe is the right way to operate.”

The third priority is improving channel productivity and capital efficiency.

Reiss said the company made “meaningful progress” against the third priority in the fiscal first quarter, witnessed by increasing engagement in both DTC and wholesale channels, with margins in both channels also expanding. He said the wholesale gains were driven by a “strong order book and customer reorders through the quarter, as well as on shipping timing.”

He added, “We view this as an important validation of our strategy, reflecting strong partner confidence in the brand and growing demand for our expanded product assortment. That confidence is reinforced by the strength of our spring-summer 2027 order book, which positions us well as we look ahead.”

Reiss said the weak traffic at its physical stores is being seen “across the luxury retail industry,” and investments to better align labor costs with demand, ongoing staff training, product availability, and continuing to enhance the in-store experience helped conversion and units per transaction to increase year-over-year in the quarter.

Reiss concluded, “The first quarter reflects the progress we are making to build a stronger, more diversified, and more profitable Canada Goose. We are expanding the reach of the brand, building a more balanced product portfolio, and creating new opportunities for growth across channels and occasions. The strong response to newer categories, alongside continued demand for our iconic core offerings, is helping drive both top-line growth and margin expansion, demonstrating that we can expand the reach of the brand while strengthening the profitability of the business. We are excited about the progress we are seeing, and we remain focused on building on that momentum through continued execution.”

Balance Sheet Highlights
Inventory of $489.9 million for the first quarter ended June 28, 2026 was up 11 percent year-over-year, primarily reflecting an expanded product assortment, a larger wholesale order book, and planned production growth to support anticipated demand for Fall/Winter 2026.

The company ended the first quarter of fiscal 2027 with net debt of CN$627.8 million, compared to CN$541.7 million at the end of the first quarter of fiscal 2026, with net debt leverage of 2.1 times adjusted EBITDA, compared to 1.8x adjusted EBITDA in the same period last year. This increase was said to be mainly due to an increase in lease liabilities.

Fiscal 2027 Outlook
This outlook constitutes forward-looking information within the meaning of applicable securities laws. The purpose of this outlook is to provide a description of management’s expectations regarding the company’s annual financial performance and may not be appropriate for other purposes. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond the company’s control.

Based on the current visibility into the business and the progress of initiatives already underway, Canada Goose reiterated its fiscal 2027 outlook as set forth below.

The outlook reflects Canada Goose’s current assessment of operating conditions, underlying demand trends, and the level of execution we believe is achievable.

For Fiscal 2027, Canada Goose expects:

  • Revenue to increase approximately low-single digits compared to the prior year.
  • Adjusted EBIT margin to be in the range of 11 percent to 12 percent.

The Outlook Assumes:

  • Revenue growth is driven by pricing actions already implemented, increased depth in its product assortment, a larger wholesale order book, and new store openings, partially offset by lower consumer demand relative to fiscal 2026, including softer traffic in key markets, reduced consumer confidence, and lower travel.
  • Gross margin expands, reflecting the benefit of pricing actions and operational efficiencies embedded in fiscal 2026 production and favorable channel mix, partially offset by product mix, raw material inflation, and supply chain cost pressures from current disruptions
  • SG&A declines as a percentage of revenue, as we balance disciplined cost management with targeted investments across channels, marketing, and technology, driving operating leverage on a consolidated basis.
  • On tariffs, management said the current outlook assumes the environment stays similar to fiscal 2026. If proposed U.S. duties were implemented without mitigation, the company estimated an operating margin impact of less than 200 basis points.

Image courtesy Canada Goose