Canada Goose’s Prospects Take a Dip Amid Economic Turmoil and China Impact
Canada Goose Holdings Inc. experienced a significant decrease in revenue and earnings due to the impact of Covid-19 outbreaks on sales in China during December, its busiest month.
The company revised its outlook for the current fiscal year and anticipated a significant drop in margins and profit. The decrease in sales resulted in an increase in inventory, about 30% higher than the previous year.
The company’s shares declined by 14% following the announcement. Executives stated that sales in China are showing signs of recovery as the country recovers from the late 2022 Covid wave, however, the economic situation is affecting consumer spending in North America.
The CEO, Dani Reiss, stated that despite a decline in revenue, they believe the challenges the company is facing are only temporary and their brand strength and strategy will help drive profitable growth.
The CFO, Jonathan Sinclair, reported that there is a macro impact on the company, as they are witnessing fewer conversions on their website, despite having more stores up than down.
The company has revised its profit expectations for fiscal 2023 and now forecasts a profit of no more than C$1.03 per share, adjusted basis, compared to the previously estimated range of C$1.31 to C$1.62.