Canada Goose sees slight increase in revenue to $281.1 mn in Q2 FY24

Direct-to-consumer (DTC) channels surged by 15 per cent to $109.4 million, marking a 12 per cent rise on a constant currency basis. This growth is primarily attributed to the expansion of in-store retail sales. The company noted an increase in the DTC's contribution to the total revenue, climbing to 39 per cent from 34 per cent in the same period the previous year, although DTC comparable sales saw a 7 per cent decline, the company said in a press release.

Wholesale revenues, however, did not fare as well, recording a 10 per cent decrease, which aligns with the company's forecasted figures, further slipping to 15 per cent on a constant currency basis. Geographically, revenue trends varied, with the Asia Pacific region experiencing a 13 per cent revenue increase, EMEA 4 with a 6 per cent growth, and North America facing a 7 per cent decline. The dip in North American revenue is mainly due to the expected drop in wholesale figures, slightly mitigated by stronger DTC performance.

The company’s gross profit increased by 8 per cent to $179.5 million, and gross margins widened to 63.9 per cent from 59.8 per cent compared to the previous year. However, operational costs, specifically selling, general and administrative expenses saw a substantial increase, rising to $177.2 million from $144.3 million.

Operating income took a significant hit, landing at $2.3 million, a stark contrast to the $21.5 million reported in the second quarter of fiscal 2023. Adjusted EBIT followed a similar trend, falling to $15.6 million from the preceding year's $26.3 million. Adjusted net income also decreased to $16.2 million, or $0.16 per basic share, from $20.3 million, or $0.19 per basic share in the second quarter of fiscal 2023.

In conjunction with financial updates, Canada Goose announced pivotal changes to its executive team. Neil Bowden, the current deputy chief financial officer (CFO), will step into the role of current CFO, and Jonathan Sinclair, the existing CFO, will take on the position of president, Asia-Pacific (APAC), both changes effective from April 1, 2024. Bowden, who has been with Canada Goose for over seven years, has been instrumental in overseeing the global finance team. Sinclair has an extensive luxury retail background with more than 20 years of global financial and operational experience.

Dani Reiss, chairman and CEO of Canada Goose, said: “We delivered solid second quarter results, with earnings exceeding our expectations and gross margin expansion despite operating in a challenging retail environment. The quarter saw us advance each of our priorities, including a favourable response to our investments in emerging categories such as rain wear, apparel and footwear; a new channel launch with the opening of our first travel luxury location; the broadening of our customer base with high impact marketing collaborations and continued operational discipline.

“I’m pleased to welcome Neil into this new role. He brings extensive financial expertise, a deep understanding of our brand, and a commitment to excellence, and will be a valuable leader in guiding our company forward in our next stage of growth and determining on our long-term financial objectives. I’m also looking forward to welcoming Jonathan into his new role as president, APAC, a region that’s incredibly important to our brand, and one that I know will continue to flourish under his leadership.”

Moreover, Larry Li, who currently holds the title of the company’s president of Mainland China, will be promoted to chief operating officer, APAC, from January 1, 2024. Li brings over 20 years of experience in luxury brand leadership throughout the APAC region, signalling Canada Goose's commitment to international expansion and consolidation.

Fibre2Fashion News Desk (DP)