Canada Goose's summer apparel helps shift company from winter-brand perception
Chief executive Dani Reiss said apparel such as T-shirts and polos have been some of the company's best sellers in recent months, helping the company change its perception that it's a winter-only brand.
"The spring summer campaign brought a fresh energy to the brand, playful and relevant with a clear message: We do summer too," Reiss told analysts on a conference call Thursday.
Rising temperatures and milder winters have pushed some retailers, including Canada Goose, to rethink their product mix. As a result, the company has been expanding its offerings to include lightweight puffers, sweaters, wind and rain wear, shoes and even eyewear in recent years.
Despite the optimism from executives over its new product lines, the luxury parka maker reported a wider net loss of $125.5 million during its fiscal first-quarter, compared with a loss of $74 million during the same quarter last year.
The loss was driven partly by higher spending on marketing campaigns and expanding its retail footprint.
On an adjusted basis, it lost $1.29 per diluted share in the quarter, compared with an adjusted loss of 80 cents per diluted share last year.
The Toronto-based company manufactures its core, down-filled products at seven facilities in Canada. That includes three in Winnipeg, three in the Greater Toronto Area, and one in Boisbriand, Que.
Sales up, despite losses
While its bottom line took a hit, the company says sales were actually higher. Revenue for the quarter totalled $107.8 million, up from $88.1 million a year ago.
Direct-to-consumer revenue totalled $78.1 million, up 22.8 per cent from a year ago, while wholesale revenue rose 11.9 per cent to $17.9 million.
Chief financial officer Neil Bowden said expanding the company's offerings over the last 12-15 months has borne fruit.
"Things are working here," he told analysts. "That's why we've got confidence around the sustainability of it in spite of what is still a pretty choppy, tough consumer market."
Consumer confidence has been hampered this year amid ongoing tariff threats from the U.S. and an economic slowdown, leading many shoppers to rein in their spending.
Bowden said 75 per cent of the company's products are made in Canada and nearly all comply with the Canada-U.S.-Mexico Agreement, making them exempt from U.S. tariffs. But it is paying a "modestly higher tariff" on its European products.
"We continue to monitor the ongoing developments as it relates to potential new U.S. tariffs on Canadian goods as well as potential second-order impacts on the consumer," Bowden said.
Canada Goose shares were trading nearly nine per cent lower at $16.17 on the Toronto Stock Exchange as of midday Thursday.
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