Why Winter Clothing Maker Canada Goose's Shares Are Plunging Today

Canada Goose Holdings Inc GOOS reported second-quarter FY2024 sales growth of 1% year-on-year to C$281.1 million. Revenue of $209.54 million missed the consensus of $279.86 million.

DTC revenue grew 15% Y/Y, and Wholesale revenue decreased 10%.

Gross profit rose 8% Y/Y to C$179.5 million, with the margin expanding to 63.9% from 59.8% a year earlier.

The operating income for the quarter fell to C$2.3 million from C$21.5 million due to higher SG&A costs.

Adjusted EBIT for the quarter decreased 40.7% to C$15.6 million. The adjusted EBIT margin was 5.5%.

Adjusted EPS was C$0.16 versus C$0.19 last year. Adjusted EPS of $0.12 surpassed the Street view of $(0.22) loss.

Inventory was C$519.7 million as of October 1, 2023, up 2% Y/Y. It held C$37.5 million in cash as of October 1, 2023.

The company announced that Neil Bowden, current Deputy CFO, has been named as its Chief Financial Officer, and current CFO Jonathan Sinclair has been named as President, APAC, both effective April 1, 2024.

Outlook: Canada Goose cut FY24 revenue guidance from C$1.4 billion – C$1.5 billion to C$1.2 billion - C$1.4 billion. It also lowered Non-IFRS adjusted EPS guidance from C$1.20 - C$1.48 to C$0.60 - C$1.40.

For Q3, GOOS sees revenue of C$575 million - C$700 million and Non-IFRS adjusted EPS of C$1.22 - C$1.76.

Price Action: GOOS shares traded lower by 9.91% at $10.00 on the last check Wednesday.