Canada Goose reports strong revenue and profit growth
14 Feb 2019
Canada Goose Holdings Inc. reported total revenue increase of 50.2 percent to 399.3 million Canadian dollars (300.8 million dollars) or 49 percent on a constant currency basis. Net income for the quarter was 103.4 million Canadian dollars (77.9 million dollars) or 93 cents per diluted share, compared to 63 million Canadian dollars or 56 cents per diluted share due to higher operating income and a lower effective tax rate. Adjusted EBITDA was 151.1 million Canadian dollars (113.8 million dollars) compared to 94.7 million Canadian dollars and adjusted net income was 107.2 million Canadian dollars (80.7 million dollars) or 96 cents per diluted share compared to 64.5 million Canadian dollars or 58 cents per diluted share.
“Fiscal 2019 is shaping up to be another year of impressive results. In our peak selling season we continued to deliver when and where it matters most, while also strengthening our foundation for future success on the global stage.” said Dani Reiss, President & CEO in a statement.
Highlights of Canada Goose’s third quarter results
The company said, DTC revenue increased to 235.3 million Canadian dollars (177.3 million dollars), driven by incremental revenue from five new retail stores and one new e-commerce site, as well as the strong performance of existing retail stores and e-commerce sites.
Wholesale revenue for the quarter, the company added, increased to 164 million Canadian dollars (123.5 million dollars), which is attributable to higher order values from existing partners, coupled with earlier shipment timing relative to last year and favourable foreign exchange fluctuations and incremental revenue from the acquisition of the business of Baffin Inc. also contributed positively.
Third quarter gross profit increased to 257.3 million Canadian dollars (193.9 million dollars), a gross margin of 64.4 percent compared to 63.6 percent last year, driven by a greater proportion of DTC revenue. Operating income was 139.9 million Canadian dollars (105.4 million dollars) compared to 89.9 million Canadian dollars (67.7 million dollars).
Canada Goose revises fiscal 2019 outlook
The company further said that based on the strength of reported financial results for the nine months ended December 31, with significant contributions from both channels, as well as current trends in the business, the company has revised its outlook for fiscal 2019. The company now expects annual revenue growth in the mid-to-high thirties on a percentage basis, compared to at least 30 percent, adjusted EBITDA margin expansion of at least 150 basis points compared to fiscal 2018, annual growth in adjusted net income per diluted share in the mid-to-high forties on a percentage basis, compared to at least 40 percent.
Key assumptions underlying the fiscal 2019 outlook above include wholesale revenue growth in the mid-to-high teens on a percentage basis, compared to high-single-digits, due to sales outperformance in the channel year-to-date.