While Canada Goose Holdings has transcended the parka that made it famous — smoothing out the business with lightweight styles for the warmer months — it still found itself subject to the heatwave and luxury malaise in Europe in the second quarter.
Net losses for the quarter ended Sept. 27 tallied $18.8 million and was a step back from losses of $15.2 million a year earlier.
Revenues rose 5.9 percent to $274 million, a 4.9 percent gain in constant currencies.
The Toronto-based company reports its results in Canadian dollars, but trades in U.S. dollars on the New York Stock Exchange and reports per-share information on that basis.
Adjusted losses of 20 cents a share were 2 cents steeper than the 18 cent deficit analysts forecast, according to Yahoo Finance.
Sales in North America were up 7.5 percent in constant currencies and Greater China was ahead 28.2 percent, but those gains were tempered by a 13.9 percent decline in Europe, the Middle East and Africa.
The weakness in the EMEA division came both from the softer luxury market there and, according to Dani Reiss, chairman and chief executive officer, “some temporary product availability issues as we implemented our new logistics network. So that was a little self-inflicted.”
But generally, Reiss said in an interview that the brand was as strong as ever, even if traffic was “a bit softer.”
“When customers came into our stores and engaged with us, they bought more products and we were able to convert at a much higher rate,” Reiss said. “E-commerce comps were positive. So customers are responding to us. Our products are resonating and our service and our experience is resonating and obviously driving some more traffic is important. It’s a bit of a macro trend these days, but all the signs we’re seeing with our customers are positive.
“We’re a year-round brand now,” he said. “The growth that we’re seeing in apparel and our apparel categories has proven that. Apparel, rainwear, wind wear — they all delivered strong double-digit growth, becoming a much larger part of our product mix. And that’s not just technical product, casual product hoodies, knitwear, all those sorts of categories that resonate, too.”
This year, Canada Goose is forecasting a low-single-digit increase in revenues with margins on adjusted earnings before interest and taxes ranging from 11 to 12 percent.
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