High-end parka maker Canada Goose warned that earlier winter shipments to retailers will drag on sales in the holiday quarter, pulling shares more than 13 per cent lower.
The shift in sales and weakened shopping trends in Hong Kong overshadowed strong results for its September quarter, as Canada Goose easily exceeded forecasts for earnings and revenue.
Dani Reiss, chief executive, said on Wednesday he was “really pleased” the group had already shipped much of its fall and winter order book versus last year, but noted the move pulled sales out of the next quarter.
Canada Goose expects wholesale revenues in the period to decline in the mid-teens on a percentage basis compared with the year-ago quarter. Analysts were looking for an increase in wholesale revenues, according to FactSet.
“It does not mean that the underlying demand in a channel is changing,” Mr Reiss told analysts during a call. Canada Goose has forecast high single-digit wholesale growth on an annual basis. It also reiterated its full-year outlook on Wednesday.
“This shift has already impacted our numbers for Europe and rest of world where revenue decreased by 3.4 per cent in constant currency. For the same reason, this is not something that I’m at all concerned about.”
US-listed shares in Canada Goose fell 13.9 per cent to $33.63, marking the stock’s steepest decline since a nearly 31 per cent drop in May. Canada Goose has lost 23 per cent of its value this year.
The company reported stronger retail shipments in its fiscal second quarter, with revenue from its wholesale business rising 22 per cent year-over-year to C$219.8m ($166m). Direct-to-consumer sales — comprised of Canada Goose stores and its ecommerce business — were up 47 per cent at C$74.2m.
Canada Goose, which makes high-end coats and other winter apparel, said revenue nearly doubled in Asia, despite protests in Hong Kong affecting the performance of stores there “significantly”, according to Mr Reiss. US sales grew 38.5 per cent in constant currency terms.
Canada Goose has opened new stores in Beijing and Hong Kong in recent years, expanding its presence in the Asian market and boosting international sales.
Revenue in the September quarter totalled C$294m, an increase of 27.7 per cent and beating analysts’ estimate of C$267m, according to Refinitiv.
Net income climbed to C$60.6m from C$49.9m. Adjusted earnings per share of 57 Canadian cents surpassed forecasts for 44 cents.