Canada Goose Holdings Inc (GOOS) Q2 2025 Earnings Call Highlights: Navigating Challenges with ...

In This Article:

  • Revenue: Decreased 5% year over year, or 6% on a constant currency basis.

  • DTC Comparable Sales: Declined 13% year over year.

  • Wholesale Revenue: Decreased 15% or 17% on a constant currency basis.

  • Gross Margin: Declined 260 basis points to 61.3%.

  • Adjusted EBIT: $2.5 million, down from $15.6 million in the previous year.

  • Adjusted Net Income: $5.2 million or 5 per diluted share, compared to $16.2 million or 16 per diluted share in the previous year.

  • Inventory: Decreased 9% year over year to $473 million.

  • Net Debt: $826 million, compared to $852 million in the previous year.

  • Store Count: Increased to 72 permanent stores.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Canada Goose Holdings Inc (NYSE:GOOS) has made significant progress in simplifying operations and advancing retail execution, positioning well for the peak selling season.

  • The company has launched a new collection that reflects both its heritage and future direction, aiming to drive brand momentum.

  • The Spring Summer 24 collection was positively received, indicating a significant market opportunity for a full-year assortment.

  • The company has expanded its product categories, including plans to launch an eyewear collection in partnership with Marshawn Eyewear in Spring 2025.

  • Canada Goose Holdings Inc (NYSE:GOOS) has successfully reduced inventory levels, marking the fourth consecutive quarter of decreasing year-over-year inventory balance.

Negative Points

  • DTC comparable sales revenue declined by 13% year-over-year, with performance in Asia Pacific and North America weighing on overall results.

  • Store traffic and conversion rates declined year-over-year, and e-commerce saw increased sessions but lower conversion rates.

  • The company experienced a 5% year-over-year decline in Q2 revenue, attributed to a decrease in DTC and planned lower wholesale revenue.

  • Gross profit decreased by 9% year-over-year, with gross margin declining by 260 basis points due to a higher proportion of non-heavyweight down revenue.

  • The company has introduced a lower range to its full-year fiscal 2025 guidance, reflecting weakening consumer sentiment and first-half performance.

Q & A Highlights

Q: Can you discuss the strategy for expanding into non-seasonal apparel and how you envision the product mix evolving over the next 3 to 5 years? A: Dani Reiss, CEO, emphasized the brand's strong position and the ongoing evolution of their product line. He highlighted the new design studio in Paris and the upcoming addition of a merchandiser to drive product expansion. Beth Clymer, President of Finance, Strategy & Administration, added that while specific long-term guidance is not provided, the themes of geographic and retail expansion, as well as growth in non-heavyweight down categories, remain central to their strategy.

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