The third quarter report data shows that in the third quarter of fiscal year 2022 as of January 2, 2022, Canada Goose achieved revenue of CAD 586 million, a year-on-year increase of 23.6%, of which DTC revenue in mainland China increased by 35.1% year-on-year.
On February 10, local time, the share price of high-end down jacket brand Canada Goose (GOOS.N) fell by more than 16%, the largest single-day drop in two years. Previously, the company released its third quarter report for fiscal year 2022 and cut its revenue and profit forecast for fiscal year 2022.
Third quarter report data shows that in the third quarter of fiscal year 2022 as of January 2, 2022, Canada Goose achieved revenue of CAD 586 million, a year-on-year increase of 23.6%, of which DTC (direct-to-consumer) revenue in mainland China increased year-on-year. 35.1%; in terms of profit, during the reporting period, the gross profit was 414 million Canadian dollars, the gross profit margin was approximately 70.6%, and the EBIT (earnings before interest and tax) was 206 million Canadian dollars, a year-on-year increase of 34.3%.
In the first three quarters of fiscal year 2022, Canada Goose achieved revenue of CAD 875 million, a year-on-year increase of 26%; gross profit was CAD 580 million, a year-on-year increase of 39.5%. The growth rates of the above indicators have slowed down compared with the mid-term report for fiscal year 2022.
Data shows that the growth in DTC sales revenue has contributed the most to Canada Goose’s total revenue growth. Canada Goose said that the increase in DTC revenue was mainly due to higher revenue from sales in existing stores, the growth of online sales, and the expansion of new retail businesses.
By region, in the first three quarters of fiscal 2022, the Asia-Pacific region, EMEA (Europe, the Middle East, Africa and Latin America), the United States, and Canada accounted for 29.5%, 26.6%, 23.4%, and 20.5% of revenue respectively.
Public information shows that Canada Goose has three operating segments, specifically DTC, wholesale and others. The DTC segment includes sales through e-commerce platforms in specific countries and the company’s directly operated retail stores in high-end shopping malls; the wholesale segment includes Sales to retailers and international distributors, etc. In the third quarter of fiscal year 2022, DTC business revenue accounted for 76% of total revenue, followed by wholesale revenue, accounting for approximately 23%.
“Canada Goose’s brand momentum and supply chain resiliency drove strong performance in our largest quarter,” said Dani Reiss, president and chief executive officer of Canada Goose.
“Our e-commerce business continues to exceed last year’s substantial growth, while retail productivity improves significantly. Despite temporary and unexpected COVID-19 disruptions in some markets, we remain optimistic about the long-term trend of revenue growth and margin expansion. Confident,” Dani Reiss pointed out.
Regarding the performance outlook for the full year of fiscal 2022, Canada Goose said that due to lower-than-expected revenue and retail traffic in the Asia-Pacific and Europe, the Middle East and Africa regions in this quarter, as well as various new epidemics and restrictions, the performance outlook for fiscal 2022 will be reduced. Revenue forecast was revised to a range of 1.09 billion to 1.1 billion Canadian dollars (860 million to 876 million U.S. dollars), down from the previous forecast of 1.13 billion to 1.18 billion Canadian dollars.
It is worth mentioning that in the past year, Canada Goose has attracted attention due to negative news many times in China. Once it was fined for falsely advertising down fillings, and another time it was hotly debated because of its “double-standard” return policy in China. After that, the company’s official Weibo issued a statement stating that all products in compliance with relevant laws and regulations will be fined. Products sold in specialty stores in mainland China can be returned and refunded. However, Dani Reiss still told analysts on the conference call that the company is very optimistic about the future prospects of development in China. China’s online business grew by more than 60% in the last quarter, indicating that Chinese consumers have demand for the company’s products.
</p
