Canada Goose sees 2.2% revenue decline in Q3 FY25

Canada Goose Holdings Inc has reported a total revenue of $607.9 million for the third quarter of fiscal 2025 (Q3 FY25), which ended on December 29, 2024, reflecting a decrease of $2.0 million or 2.2 per cent on a constant currency basis from the prior year.

Direct-to-consumer (DTC) revenue saw a slight increase of 0.7 per cent to $517.8 million but declined by 1.4 per cent on a constant currency basis, with comparable DTC sales down 6.2 per cent, partially offset by sales from non-comparable stores. Wholesale revenue fell by 7.5 per cent to $75.7 million, or 8.1 per cent on a constant currency basis, as part of the company’s strategy to refine its presence in the sales channel by optimising inventory and strengthening partnerships. Other revenue increased marginally by $0.3 million to $14.4 million, the company said in a press release.

Gross profit rose by 0.5 per cent to $452.0 million, with a gross margin of 74.4 per cent, up from 73.7 per cent in the same quarter last year, attributed to pricing adjustments and lower inventory provisioning, partially offset by product mix. Selling, general, and administrative (SG&A) expenses decreased to $247.7 million from $250.9 million in the previous year, primarily due to cost efficiencies, workforce reductions in fiscal 2024, and reduced foreign exchange-related costs. However, this was partially counterbalanced by increased marketing spend on the Snow Goose campaign and store-related expenses, including labour costs associated with the expansion of the company’s global retail footprint.

Operating income rose to $204.3 million from $198.8 million in the prior year, while adjusted EBIT stood at $205.2 million, compared to $207.2 million in the same period last year. Net income attributable to shareholders reached $139.7 million, or $1.42 per diluted share, up from $130.6 million, or $1.29 per diluted share, in the prior year. Adjusted net income attributable to shareholders increased to $148.3 million, or $1.51 per diluted share, compared to $138.6 million, or $1.37 per diluted share, a year earlier.

The company reported an inventory level of $407.4 million at the end of the quarter, marking a 15 per cent year-over-year decline due to a temporary reduction in production levels. Canada Goose ended the quarter with net debt of $546.4 million, compared to $587.4 million in the previous year, benefitting from higher cash balances driven by a working capital release.

“Our third quarter results highlight the power of strong execution during a key consumer shopping period, particularly in December where we saw significant acceleration in the business. Brand momentum was robust in the quarter, amplified by the integrated global launch of our new Snow Goose collection which drove record-setting media coverage and a three-year high in brand search. Our retail execution delivered solid results despite ongoing macro challenges and, looking ahead, our focus remains on balancing operational excellence with strategic investments and strengthening the foundations that will continue driving both brand heat and commercial momentum across all our channels,” said Dani Reiss, chairman and CEO of Canada Goose.

Looking ahead, Canada Goose updated its FY25 guidance, maintaining its outlook of a low-single digit increase to a low-single digit decrease in total revenue growth. However, the company revised its non-IFRS adjusted EBIT margin outlook to a flat to negative 100-basis point range, compared to the previous expectation of a 60-basis point increase to a 60-basis point decrease. Similarly, adjusted net income per diluted share is now expected to see a low-single digit increase to flat growth, down from the previous mid-single digit increase projection. These updates reflect softer-than-expected performance in DTC sales, impacted by global luxury consumer spending trends, and increased marketing investments.

Canada Goose reaffirmed several operational assumptions for the fiscal year, including a 25/75 per cent revenue split between the first and second halves of the year, the opening of two new stores and three concession-based shop-in-shops, and an expected 20 per cent decline in wholesale revenue. The company also maintained its pricing strategy, forecasting an average mid-single digit increase, and expects gross margins to remain similar to fiscal 2024 levels.

The third quarter also saw key business highlights, including the launch of Haider Ackermann’s inaugural capsule, reintroducing the Snow Goose label through a comprehensive 360-degree campaign featuring in-store activations, influencer collaborations, social media efforts, and brand events in locations such as Iceland, Seoul, and Toronto.

As part of its brand evolution, the company elevated the wholesale shopping experience at Selfridges in London, unveiling a Polar Bears International pop-up and showcasing its Fall/Winter 2024 collection through a bold visual display. Canada Goose also expanded its retail footprint with two new concession-based shop-in-shops, bringing its total store count to 74 at the end of the quarter. Additionally, the company appointed Judit Bankus as the new Head of Merchandising.

ALCHEMPro News Desk (HU)