Canada Goose sees Asia revenue go up despite Hong Kong protests
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The Hong Kong market has been a tough topic for a lot of retailers, especially those who have the mains consumer base in China. This was one of the reasons behind the fall in stock prices for Tiffany that got acquired by LVMH. Tiffany while not as prominent in the US anymore, relied heavily on its Asian consumer base but amidst the protests, its consumption fell flat. But this doesn’t seem to be the case with the Canada Goose.
While the shares still sank, the revenues are more than 25% in its most recent quarter in Asia, despite the complicated situation in Hong Kong. Canada Goose shares lost 4.96% on the Toronto Stock Exchange but the consumers seem to be loving the infamous coats still.
Canada has been going through a crisis of its own. With 71 thousand people losing their jobs, the worst month for job losses in decades. Some industries are struggling while others are still thriving. IGaming hasn’t really taken a hit by all of this and you can still enjoy the best Canadian online casino or real-life gambling venues. But the overall economy while resilient is still not in a great place. Canadian Goose, a luxury parka retailer that has always been popular in Asia also seems to be resilient. Before the value dropped the company warned about this possibility, saying that the wholesale revenues were expected to decrease in the third quarter because orders were advanced leaving fewer remaining winter orders to come.
Despite this, the Canada Goose reported $60.6 million second-quarter revenues. While the Asian share of their revenue nearly doubled.
Asian Market Loyal to the Canadian luxury parkas
The Asian market still loves this product and the decrease of tourists doesn’t seem to be affecting the company all that much since its customer base in the continent is still there.
The company was founded back in 1957 and since then has been a renowned manufacturer of winter clothes that were always loved in Asia and this new statistic proves just that.
But still, the Canadian Goose had way higher expectations with the aiming at 43 % profit per share and $267.3 million in revenue. Canada Goose is one of the businesses that more or less survived the major drop caused by the protests and is still staying afloat, and surprisingly largely thanks to the Asian market. It managed to score $48.9 million this year, compared to the 2018 number that got the company $26.2 million in the second quarter of 2018.
“But still, the Canadian Goose had way higher expectations with the aiming at 43 % profit per share and $267.3 million in revenue.”
While the numbers are definitely impressive according to the company representative, this does not paint a full picture. According to them the company’s store in Shanghai and Hong Kong have been impacted significantly by the reduction of tourism but luckily real-life stores are not their only viable source of income.
The company is watching the local events very closely and tries to evaluate the action to streamline its costs base on the grounds. This includes negotiating accommodations from landlords as well. Canadian Goose seems to be in the Asian market for a long haul since according to the representative they have plans to stick around for years, as they have done in the past and even if they don’t perform all that well during one quarter it doesn’t mean that they will give up on the market that has been so loyal to them.
This attitude definitely makes them stand out in the Asian Market, which has seen far too many companies distressed over one unsuccessful quarter. This is part of the reason why the customer has stayed so loyal to these luxury parkas and have managed to turn their market into one of the key markets for the Canadian Brand.
Tough times for Canadian brands
When it comes to Canada and its economic struggle of the moment the situation is a little unstable. Whether or not it will affect the company is yet unclear but the officials are stating that they can bounce back from the biggest cuts in jobs in decades and get their “resilient” economy back on track. With the home market struggling along with its major consumer group also staying back, Canada Goose is in for an interesting quarter, to say the least.
But since the locals have remained loyal to the Canada goose products company will now probably put even more effort and attention towards the Asian market. The prediction on whether or not the situation in Hong Kong will last much longer are not very reliable. So the Companies must be ready for the worst-case scenarios.
It seems like even with that setup Canadian Goose is bound to have a better chance of surviving compared to other similar brands. Their main selling point has always been the quality that has stayed consistent throughout the years so it is expected that the customers will keep relying on the Canadian brand despite the economic hardship both in their hometowns of home countries and from the company’s part as well.
Some even predict a 40% chance of a recession in Canada among two rate cuts but the government officials are staying more positive, at least in the public eye.
Questions & Answers
Q.How did Canada Goose's recent financial performance compare to its expectations?
How did Canada Goose's recent financial performance compare to its expectations?
The company reported $60.6 million in second-quarter revenues, with Asian revenue nearly doubling. However, Canada Goose had aimed for higher figures, expecting a 43% profit per share and $267.3 million in revenue overall.
Q.Why did Canada Goose previously warn about potential decreases in wholesale revenues?
Why did Canada Goose previously warn about potential decreases in wholesale revenues?
The company had warned that wholesale revenues were expected to decrease in the third quarter. This was because orders had been advanced, which left fewer remaining winter orders to come in later.
Q.What impact have the Hong Kong protests and reduced tourism had on Canada Goose's stores?
What impact have the Hong Kong protests and reduced tourism had on Canada Goose's stores?
According to a company representative, the stores in Shanghai and Hong Kong have been significantly affected by the reduction in tourism. However, real-life stores are not their only source of income.
Q.How is Canada Goose responding to the local events and challenges in the Asian market?
How is Canada Goose responding to the local events and challenges in the Asian market?
Canada Goose is closely monitoring local events and evaluating actions to streamline its cost base. This includes negotiating accommodations from landlords, showing their commitment to the Asian market for the long term.
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