Canada Goose Holdings Inc, the luxury winterwear manufacturer, is confident in its sales outlook for the year and expects to exceed Street estimates. The company’s positive forecast is primarily attributed to the rebound of China’s luxury market, compensating for a slowdown in demand in the United States. As China’s strict Covid-19 policies are relaxed, consumers are returning to stores and indulging in high-end goods from brands like Coach, Cartier, and Birkin. This revival in the Chinese luxury market has given Canada Goose a much-needed boost in sales, especially as affluent American shoppers have reduced their post-pandemic spending on luxury items. Notably, other companies such as LVMH and Kering have also reported declining sales in the U.S. market.
In the last quarter, Canada Goose witnessed a 65.4% surge in revenue in the Asia Pacific region, reaching C$114.1 million. This, combined with strong demand in Europe and Canada, helped the company exceed expectations in its fourth-quarter results. However, U.S. revenue declined by 4.5% during the same period. Chief Financial Officer Jonathan Sinclair acknowledged this decline and stated that the company is not setting overly ambitious goals for the U.S. market this year. Despite this caution, Canada Goose remains optimistic about China’s growth potential, especially once Chinese consumers resume traveling, as it is expected to further boost sales in other regions.
With 18 retail stores in Mainland China, Canada Goose has the highest number of outlets for the brand in any country. The company plans to capitalize on this success by more than doubling its store count worldwide over the next five years, expanding from the current 51 permanent stores. This expansion strategy demonstrates Canada Goose’s commitment to meeting the growing demand for luxury winterwear.
Headquartered in Toronto, Ontario, Canada Goose anticipates revenue for fiscal year 2024 to range from C$1.40 billion ($1.05 billion) to C$1.50 billion, surpassing analysts’ estimated C$1.33 billion based on Refinitiv data. However, the company projects an annual per-share profit between C$1.20 and C$1.48, slightly lower than the estimated C$1.46 per share.
In conclusion, Canada Goose’s positive sales outlook, driven by the recovery of China’s luxury market, demonstrates the company’s resilience and adaptability to changing consumer trends. With its expansion plans and focus on new markets, Canada Goose is well-positioned for continued success in the luxury apparel industry.
Useful links:
1. China’s luxury market recovery
2. Canada Goose’s fourth-quarter results
