Via https://newsapi.org online business online marketing online business opportunities Why Canada Goose’s 28% Shares Slump Isn’t A Cause For Worry

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via https://newsapi.org online business online marketing online business opportunities Canada Goose shares slumped 28% after its sales growth outlook fell short.

Canada Goose, known for its down-filled jacket, bets on opening more retail stores and selling online to drive growth. (Photo by Timur Emek/Getty Images)

Getty Images

Canada Goose’s shares slumped 28% on Wednesday after the $1,000 luxury parka maker gave an annual sales growth outlook that missed Wall Street expectations. 

While Wall Street may be busy updating financial estimates to correspond with the company’s guidance, the brand known for its extreme weather gear is actually doing just fine and is still an envy in the retail industry. 

The Toronto-based down coat maker forecast annual sales on average to rise at least 20% over the next three years, after sales in the fiscal year that ended March 31 rose 40.5% to CAD$830.5 million, or $614 million.

Its direct-to-consumer business, a key growth focus, jumped to 52% of total business, from 43% a year earlier, after it added five new stores and one new e-commerce market. Wholesale sales to customers includingNeiman Marcusand Nordstrom also rose. Demand was higher in every market, including a 28.2% increase in Canada, a 36.3% jump in the U.S. and a 60.5% surge elsewhere.

In Greater China, the world’s largest luxury market, Canada Goose unveiled its own direct-to-consumer business last year, ending the year with a global footprint of 11 company-operated retail stores and 12 online national markets, it said. 

Even more noteworthy, gross margin, or the percentage of sales left after the cost of goods sold—and an indicator of profit—expanded to 62.2%, from 58.8%. Operating income jumped more than 42%. 

“We entered this year with a very ambitious growth agenda, our biggest ever, and we have surpassed it with flying colors,” president and CEO Dani Reiss, whose grandfather founded the company out of a small Toronto warehouse in 1957 before it became a luxury brand and went public in 2017, said on a conference call. “Our global platform has never been stronger.”

In a continued move to expand its product line beyond the extreme weather collection to things that consumers can wear in the spring and fall, the company has introduced rain gear, knitwear and a lightweight down collection. 

“We are very confident of our growth opportunities ahead of us and all the levers that we have to pull in a different ways we can grow,” Reiss said, responding on the call to an analyst question on why it gave a growth outlook that was half of last year’s sales rate. “Demand is extremely healthy for our brand.”

He may be right. For one thing, many retailers have a tendency to give a “conservative” growth outlook that they then exceed. Meanwhile, as retailers like Abercrombie & Fitch have raised watch points including declining mall traffic, Brexit, the U.S.-China tariffs war and other macroeconomic concerns, none of those topics surfaced on Canada Goose’s call Wednesday.

“’Made in Canada’ is not just a slogan for us,” Reiss said. “The depth of our Canadian production expertise and the scale of our infrastructure is a significant competitive advantage.” 

Canada Goose, like other outdoor brands including North Face and Patagonia, has benefited from experience-seeking consumers’ active outdoor lifestyles and the athleisure trend. And the solid luxury industry forecast also favors its outlook. Its luxury rival Moncler, for example, said sales have grown each year, with an average annual growth of 24% between 2003 and 2018, when sales rose to 1.42 billion euros, or $1.58 billion.  

Related on Forbes:What Abercrombie’s results say about the state of retail

Related on Forbes: How IKEA is going small to increase urban and online sales

Related on Forbes: Casper wants to be more than a mattress company

Related on Forbes: How French luxury label Hermès plans to attract millennials

Related on Forbes:Neiman Marcus’s ‘Retail Theater’ Play

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via https://newsapi.org online business online marketing online business opportunities Canada Goose shares slumped 28% after its sales growth outlook fell short.

Canada Goose, known for its down-filled jacket, bets on opening more retail stores and selling online to drive growth. (Photo by Timur Emek/Getty Images)

Getty Images

Canada Goose’s shares slumped 28% on Wednesday after the $1,000 luxury parka maker gave an annual sales growth outlook that missed Wall Street expectations. 

While Wall Street may be busy updating financial estimates to correspond with the company’s guidance, the brand known for its extreme weather gear is actually doing just fine and is still an envy in the retail industry. 

The Toronto-based down coat maker forecast annual sales on average to rise at least 20% over the next three years, after sales in the fiscal year that ended March 31 rose 40.5% to CAD$830.5 million, or $614 million.

Its direct-to-consumer business, a key growth focus, jumped to 52% of total business, from 43% a year earlier, after it added five new stores and one new e-commerce market. Wholesale sales to customers includingNeiman Marcusand Nordstrom also rose. Demand was higher in every market, including a 28.2% increase in Canada, a 36.3% jump in the U.S. and a 60.5% surge elsewhere.

In Greater China, the world’s largest luxury market, Canada Goose unveiled its own direct-to-consumer business last year, ending the year with a global footprint of 11 company-operated retail stores and 12 online national markets, it said. 

Even more noteworthy, gross margin, or the percentage of sales left after the cost of goods sold—and an indicator of profit—expanded to 62.2%, from 58.8%. Operating income jumped more than 42%. 

“We entered this year with a very ambitious growth agenda, our biggest ever, and we have surpassed it with flying colors,” president and CEO Dani Reiss, whose grandfather founded the company out of a small Toronto warehouse in 1957 before it became a luxury brand and went public in 2017, said on a conference call. “Our global platform has never been stronger.”

In a continued move to expand its product line beyond the extreme weather collection to things that consumers can wear in the spring and fall, the company has introduced rain gear, knitwear and a lightweight down collection. 

“We are very confident of our growth opportunities ahead of us and all the levers that we have to pull in a different ways we can grow,” Reiss said, responding on the call to an analyst question on why it gave a growth outlook that was half of last year’s sales rate. “Demand is extremely healthy for our brand.”

He may be right. For one thing, many retailers have a tendency to give a “conservative” growth outlook that they then exceed. Meanwhile, as retailers like Abercrombie & Fitch have raised watch points including declining mall traffic, Brexit, the U.S.-China tariffs war and other macroeconomic concerns, none of those topics surfaced on Canada Goose’s call Wednesday.

“’Made in Canada’ is not just a slogan for us,” Reiss said. “The depth of our Canadian production expertise and the scale of our infrastructure is a significant competitive advantage.” 

Canada Goose, like other outdoor brands including North Face and Patagonia, has benefited from experience-seeking consumers’ active outdoor lifestyles and the athleisure trend. And the solid luxury industry forecast also favors its outlook. Its luxury rival Moncler, for example, said sales have grown each year, with an average annual growth of 24% between 2003 and 2018, when sales rose to 1.42 billion euros, or $1.58 billion.  

Related on Forbes:What Abercrombie’s results say about the state of retail

Related on Forbes: How IKEA is going small to increase urban and online sales

Related on Forbes: Casper wants to be more than a mattress company

Related on Forbes: How French luxury label Hermès plans to attract millennials

Related on Forbes:Neiman Marcus’s ‘Retail Theater’ Play

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