(Bloomberg) -- Canada Goose Holdings Inc. reported revenue and earnings that fell far short of analysts’ estimates after Covid-19 outbreaks hurt sales in China in December, the company’s busiest month. 

The Canadian manufacturer of high-end parkas and apparel slashed its outlook for the current fiscal year, forecasting that margins and profit will be significantly lower than expected. Slower sales meant that inventories were up — about 30% higher than a year earlier.

Canada Goose shares dropped 14% to $21.21 at 9:55 a.m. in New York.  

Executives said they’re seeing evidence that sales are rebounding in China as the country recovers from the Covid wave of late 2022. But the economic environment is affecting consumer appetite in North America. 

“There is definitely a macro impact. There’s no doubt about that,” Chief Financial Officer Jonathan Sinclair told analysts on a conference call. “We’ve got more stores up than down. But what we are seeing is less conversion happening on the website.”

For fiscal 2023, the company is now expecting profit of no more than C$1.03 a share, on an adjusted basis. It previously forecast C$1.31 to C$1.62 per share.

Revenue of C$577 million ($433 million) was down 2% over the same period a year ago. 

“We believe these challenges are temporary and our brand strength and strategy position us well to drive profitable growth,” Chief Executive Officer Dani Reiss said in a statement.  

(Updates share move, adds comment from analyst call)

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