Why Is Winter Clothing Maker Canada Goose's Stock Soaring Today?

Canada Goose Holdings Inc GOOS shares are trading higher after the company reported better-than-expected fourth-quarter FY24 earnings.

The company reported fourth-quarter sales growth of 22% year-on-year to C$358 million, beating the analyst consensus estimate of C$315.491 million.

DTC revenue grew 19% Y/Y, and Wholesale revenue decreased 9%.

Gross profit rose 22% Y/Y to C$233 million, with the margin expanding to 65.1% from 64.9% a year earlier.

The operating income for the quarter expanded to C$23.1 million from C$17.6 million last year.

Adjusted EBIT for the quarter rose 50.7% to C$40.1 million. The adjusted EBIT margin was 11.2%.

Adjusted EPS of C$0.19 surpassed the Street view of C$0.07.

Inventory was C$445.2 million as of March 31, 2024, down 6% Y/Y. It held C$144.9 million in cash as of March-end.

The company opened three permanent stores in the fourth quarter for a total of 17 permanent stores opened in fiscal 2024, bringing the total permanent store count to 68 at the end of fiscal 2024. 

“During the period, we increased revenue and gross profit, underpinned by positive comparable sales growth, and expanded our adjusted EBIT margin5, while navigating a difficult environment,” said Chairman and CEO Dani Reiss.

Outlook: Canada Goose sees FY25 revenue growth in the low-single-digits year-over-year.

The company thinks it is prudent to remove the long-term financial targets provided in the February 2023 press release due to changes in business conditions, including a more challenging consumer spending environment, as well as additional work required to strengthen the foundation of its retail operating platform.

Particularly, DTC comparable sales and wholesale revenue have not performed according to its expectations, the company said. 

Price Action: GOOS shares traded higher by 13.94% at $13.01 in premarket at the last check Thursday.

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