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Canada Goose Caution on US Eclipses Upbeat Annual Sales Forecast

Canada Goose red fur trimmed coat.
Canada Goose Holdings Inc saw smaller demand in the US compared to an increase in sales in China's market. (Shutterstock)

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.

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“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

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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.

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