Canada Goose Holdings Inc on Thursday struck a cautious note on its business in the United States as luxury spending cooled in the market, overshadowing an upbeat annual sales forecast driven by a recovery in China and sending its shares down about 11 percent.

A reversal in the strict Covid-19 policies in China — a top market for luxury goods — has encouraged wealthy shoppers there to snap up everything from Cartier jewellery and Birkin bags, boosting sales at several high-end labels.

However, shoppers in the United States are putting a pause to a post-pandemic splurge on high-end clothing and accessories, with companies including ultra-luxury fashion houses like LVMH and Gucci owner Kering seeing sagging demand.

British luxury label Burberry on Thursday also noted there was a “challenge (in the US) at the moment”, with sales falling 7 percent in the Americas.

“We’re not being super ambitious for this year in the US ... the market is going to be a little bit more challenging in the US because of the macroeconomics,” Canada Goose chief financial officer Jonathan Sinclair said on an earnings call.

Canada Goose, popular for its bright-red parkas and pricey puffer jackets, saw US revenue decline 4.5 percent in the reported quarter.

“The US customer is a little bit more apprehensive. They are more price-conscious, especially now, and the luxury consumer is spending a lot less,” said Liza Amlani, principal at consulting firm Retail Strategy Group.

Canada Goose also forecast annual per-share profit in the range of C$1.20 to C$1.48, the midpoint of which was lower than estimates of C$1.46 per share, according to Refinitiv data.

Still, a 65.4 percent surge in Asia Pacific revenue, coupled with robust demand in Europe and Canada, helped the luxury winterwear maker beat expectations in its fourth-quarter results.

Toronto, Ontario-based Canada Goose said it expects fiscal 2024 revenue between C$1.40 billion ($1.05 billion) and C$1.50 billion, while analysts were expecting C$1.33 billion.

By Deborah Mary Sophia

Learn more:

Canada Goose Cuts Annual Forecasts Due to Covid-Related Disruptions in China

Canada Goose Holdings Inc trimmed its full-year revenue forecast on Thursday as Covid-induced restrictions weigh on sales of upscale jackets and parkas in China.