Canada Goose Q2 revenues jump 33.7 percent, revises FY19 outlook

Canada Goose Holdings Inc. for its second quarter ended September 30, 2018 reported total revenue increase of 33.7 percent to 230.3 million Canadian dollars (174 million dollars) or 31.5 percent on a constant currency basis. Net income, Canada Goose said increased to 49.9 million Canadian dollars (37.7 million dollars) or 0.45 Canadian dollar per diluted share, while adjusted net income increased to 51 million Canadian dollars (38.5 million dollars) or 0.46 Canadian dollar per diluted share and adjusted EBITDA reached 70.9 million Canadian dollars (53.5 million dollars) compared to 46.3 million Canadian dollars.

“Continuing the momentum of the first quarter, the results we delivered in the second quarter are exceptional. With such an outstanding first half of the fiscal year, we are in a strong position ahead of our peak selling season,” said Dani Reiss, President & CEO of Canada Goose in a statement.

Highlights of Canada Goose’s second quarter results

The company said, wholesale revenue for the quarter increased to 179.9 million Canadian dollars (136 million dollars) driven by higher order values from existing partners, earlier shipment timing relative to last year and favourable foreign exchange rate fluctuations.

DTC revenue increased to 50.4 million Canadian dollars (38 million dollars). The company added that strong performance of well-established retail stores and e-commerce sites, and incremental revenue from four new retail stores opened in the third quarter of fiscal 2018, were both significant contributors.

Gross profit increased to 128.5 million Canadian dollars (38 million dollars), a gross margin of 55.8 percent compared to 50.6 percent driven by a greater proportion of DTC revenue, as well as underlying gross margin expansion at the respective channel levels. Operating income rose to 65 million Canadian dollars (49 million dollars), driven by revenue growth and gross margin expansion, partially offset by SG&A growth investments.

Canada Goose revises fiscal 2019 outlook

Based on the strength of performance across the business, with a particularly significant contribution from the DTC channel, the company now expects fiscal 2019 results to exceed the outlook which was originally provided with the release of fourth quarter and fiscal year 2018 results on June 15, 2018. For fiscal 2019, the company currently expects annual revenue growth of at least 30 percent, adjusted EBITDA margin expansion of at least 150 basis points compared to full year fiscal 2018, and annual growth in adjusted net income per diluted share of at least 40 percent.

Key assumptions underlying the fiscal 2019 outlook include wholesale revenue growth in the high-single-digits on a percentage basis and five new retail stores in operation by the onset of the peak winter selling season.

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