Fashion
Luxury parka maker Canada Goose reported a smaller-than-expected first-quarter loss on Thursday, amid growing revenue from its direct-to-consumer business.
The Toronto-based company reported a net loss of $18.7-million, or 17 cents, in the quarter ended June 30, narrower than analyst expectations for a loss of $22.3-million, or 21 cents. It posted a loss of $12.1-million, or 11 cents, a year earlier.
Canada Goose shares surged as much as 6.5 per cent in Toronto in early trading and were up 4.6 per cent at $76.07 at 9:34 a.m. ET (1334 GMT).
The maker of $900-parkas has been focused on expanding margins by taking more control of its manufacturing and retail sales. Largely cushioned from the retail industry’s struggles by its luxury pedigree, it is opening more of its own stores, pushing into China and Hong Kong, and has expanded into new product lines including knitwear.
The company’s gross margin jumped to 64 per cent in the quarter from 47 per cent a year earlier.
Canada Goose maintained forecasts for its 2019 fiscal year of annual revenue growth of at least 20 per cent and adjusted net income per share expansion of at least 25 percent.
Investors have rewarded the company, with its shares up 83 per cent this year, versus a minuscule gain of 0.6 percent in the Toronto Stock Exchange’s S&P/TSX composite index.
The company operates seven stores around the world, with another three set to open in North America by year-end.
It said in May it will open a store each in Beijing and Hong Kong with partner ImagineX Group this fall, and will start e-commerce sales in China through Alibaba Group’s Tmall. It has said it plans to open up to 20 stores by the end of 2020.
“Productivity across our retail store network in this off-peak period was exceptional, reducing the loss impact of our strategic growth investments and giving us a favorable tailwind for the rest of the year,” Chief Executive Officer Dani Reiss said in a regulatory filing.
Revenue grew 58.5 per cent to $44.7-million in the first quarter, driven by the direct-to-consumer division — its own stores and online sales — which rose to $23.2-million from $8.3-million a year earlier. Wholesale revenue increased to $21.5-million from $19.9-million.
