Canada Goose Returns to Profitability
Canada Goose Holdings is back in the black and looking to build — through the colder months and the coronavirus.
The Toronto-based parka maker turned second-quarter profits of 12.5 million Canadian dollars — down from earnings of 58 million Canadian dollars a year earlier, but also a big bounceback from losses of 50.1 million Canadian dollars in the first quarter, when stores were locked down to social distance.
Revenues for the quarter ended Sept. 27 fell 33.7 percent to 194.8 million Canadian dollars.
But Dani Reiss, president and chief executive officer, told WWD he was “very happy with the quarter” and said the cold-weather company’s business was “accelerating right now when it matters most” and that global e-commerce revenues were up over 10 percent.
Reiss also noted that the brand’s Mainland China business has returned to pre-COVID-19 levels with direct-to-consumer revenues in the country up more than 30 percent. Canada Goose’s retail footprint in China more than doubled during the quarter to nine stores.
The ceo — who has built on the business founded by his grandfather, Sam Tick, in 1957 — said the brand is especially well-positioned for such an uncertain world.
“We are a brand that is known for protection,” Reiss said. “We are the reference parka. I don’t think we’ve ever been more relevant. People are looking to spend more time outside and not just for the usual reasons, but also out of necessity. They have to get outdoors through this winter to go and see their friends and family.”
It’s not business as usual, but there are signs the regular cadence is coming back at Canada Goose.
Reiss said the company was driven by a “significant acceleration in September” that has continued into October.
“We came into this year with a lot of uncertainties and a lot of unknowns,” he said. “This [acceleration] is in line with what usually happens.”
That little bit of normality was more than welcome.
“There’s almost more knowns than unknowns now,” he said.
And that’s saying a lot.
There are other signs that Canada Goose is among the brands set to continue to strengthen their market position on the other side of the pandemic.
Reiss said the company has been well served by cost cuts early in the coronavirus shutdown and is now “investing more into marketing to grow demand — we have the ability to do that.”
He described this as “a perfect time for brand-building” and noted, “times of crisis are the perfect time to build the brand and gain market share.”
Asked about the U.S. business, the ceo noted: “I’m an optimistic guy. I remain very optimistic that we are a very agile and flexible company. The trajectory I’m seeing in our business is the right trajectory.”
And while the brand — like nearly every fashion brand — is doubling down on its direct-to-consumer business, Reiss said “wholesale is doing really well for us” and that although the dynamics in the market had the company shipping a little later this year, some wholesale partners are wishing they’d received more earlier.
Now Canada Goose is working to fill that demand — and pushing forward.
As Reiss told analysts on a conference call: “We continue to navigate the ongoing complexities of today’s world and witness how the pandemic is reshaping the global economic landscape.…The uncertainties that we have faced this year have sharpened our focus and made us even more disciplined and flexible.”
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