Aug 11, 2020
Canada Goose dips on slow traffic in reopened stores
Bloomberg News
,Canada Goose revenues tumble - company warns of more pain ahead
Key Insights
-The height of the crisis hit the company during its quietest season, as parka orders tend to pick up closer to winter months. While 21 of 22 of its retail stores have reopened, traffic is “considerably lower” than a year earlier, according to the company, which predicted a “significant” revenue decline in the current quarter.
-Revenue in the first quarter, which ended June 28, was $26.1 million, down 63 per cent from a year earlier. The company isn’t providing an outlook for 2021.
-The company has been decreasing its reliance on wholesalers and focus on its own, more lucrative stores and e-commerce. Shipments to wholesalers are “materially lower” and will generate lower revenue this year, the company said. The wholesale channel represented 74.2 per cent of sales in the second quarter last year.
-Canada Goose has resumed production, in parallel to manufacturing COVID-19 protective equipment. Output will be about one-third of last year’s levels as the company plans a significant inventory drop by the end of the fiscal year in March.
Market Reaction
-Canada Goose’s U.S.-listed shares were down nearly five per cent as of 9:53 a.m. New York time. They had dropped 32 per cent this year through Monday’s close.
-The stock drop makes the company a candidate to be taken private again, BTIG analyst Camilo Lyon wrote Monday.