Canada Goose's 'Stellar' Q4 Reinforces Bullish Case

To suggest Canada Goose Holdings Inc GOOS merely exceeded expectations in its fiscal fourth-quarter earnings report would be an "understatement," according to Canaccord Genuity.

The Analyst

Canaccord Genuity's Camilo Lyon maintains a Buy rating on Canada Goose's Toronto-listed stock with a price target lifted from C$58 to C$90.

The Thesis

Canada Goose last Friday reported a "stellar" earnings report, which makes it clear the company continues to evolve from merely a product-driven company towards a global lifestyle brand, Lyon said in a note. The earnings also detail how management is starting to leverage the "experiential components" of its retail strategy which is necessary for long-term growth across all regions and categories.

Meanwhile, Canada Goose's strong metrics in the quarter, including a 16-cent EPS beat and 144 percent revenue growth, is due to strong comp growth, better than expected performance in new store openings, country specific e-commerce sites and favorable weather trends, the analyst said. Perhaps more important, the positive tailwinds will likely continue into fiscal 2019 and beyond, especially when considering the company is in the early stages of an "immense" long-term opportunity in China.

Canada Goose's initial fiscal 2019 guidance of at least 20 percent revenue growth and 25 percent EPS growth appears conservative, the analyst said. The company is not only "firing on all cylinders," but remains the "best retail growth story."

Price Action

Shares of NYSE-listed Canada Goose were trading higher by more than 6 percent Monday and hit a new all-time high of $66.30.

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