Parka maker Canada Goose Holdings Inc. posted better-than-expected revenue, showing the pandemic slump is easing just in time for the crucial winter period. “This is a strong backdrop as we head into peak Canada Goose season,” Chief Executive Officer Dani Reiss said in a statement.

The company is recovering from the COVID-19 crisis that forced it to temporarily close stores from Beijing to Toronto earlier this year -- though it’s not yet back to pre-pandemic levels as department stores who sell the brand continue to languish. Revenue for the second quarter ended Sept. 27 fell 34 per cent year on year to C$194.8 million, above the average of C$166 million expected by analysts.

Key Insights

• In an echo of luxury brands like Moncler SpA and LVMH, Canada Goose is getting a boost from China, which successfully contained the virus and has turned into one of the few bright spots of the world economy. Direct sales in China, where the company is already adding four new stores this fiscal year, climbed 30 per cent. “Mainland China has already returned to growth and our digital business is accelerating in a meaningful way at the right time,” Reiss said.
• With COVID-19 cases flaring in Europe and North America, the brand is well placed to benefit from an increased push outdoors as consumers try to keep visiting with friends on porches and yards well into the winter. Still, it said it can’t yet give a forecast into how good the future looks. It cited “continued global uncertainties, including second wave shutdowns and disruptions, the pace of retail traffic recovery, and the impact of economic developments and travel restrictions, all of which are unknown.”
• The company has been decreasing its reliance on wholesalers and focusing on its own online operations and physical stores, which are more lucrative. This year, it’s also shipping parkas later in the season, to limit risks of discounts. Revenue from wholesale was cut almost in half, representing about 61% of sales, down from 75% a year earlier, as it focuses more on direct-to-consumer sales.

Market Reaction

• Canada Goose U.S.-listed shares are down 9.2 per cent this year through Wednesday’s close. They’ve more than doubled from a March 16 low of US$14.86.