Canada Goose Shares Plunge after Reporting Weaker Q4 Results | Financial Buzz

Canada Goose Shares Plunge after Reporting Weaker Q4 Results

Canada Goose Holdings Inc. (NYSE: GOOS) reported its fourth quarter and fiscal 2019 financial results before the opening bell on Wednesday. The Toronto-based Company reported weaker-than-expected revenue, causing shares to plunge by 21.5%.

For the fourth quarter, Canada Goose reported earnings of CAD 0.09 per share on revenue of CAD 156.2 Million. Refinitiv analysts expected earnings of CAD 0.05 per share on revenue of CAD 159.2 Million.

Despite the revenue miss, Canada Goose reported that revenue increased exponentially year-over-year. For the fiscal year, the Company reported that revenue rose by 40.5% to CAD 830.5 Million. Canada Goose primarily saw strength within its international markets, as revenue rose by 60.5% during the fiscal year. Canada sales increased by 28.2%, while U.S. sales jumped by 36.3% in the same period.

Global footprint of 11 directly operated retail stores and 12 national e-commerce markets increased DTC sales to over half of the total revenue at 51.9%.

Wholesale revenue increased to CAD 399.2 Million from CAD 336.2 Million a year prior. The growth in wholesale revenue was driven by higher order values from existing partners. DTC revenue increased to CAD 431.3 Million from CAD 255.0 Million, representing 51.9% of Canada Goose’s total revenue. The increased in DTC revenue was a result of the Company’s five new retail stores and a new e-commerce market.

For fiscal 2020, Canada Goose is forecasting revenue growth of at least 20% and annual growth in adjusted income per diluted share of at least 25%. The Company provides this guidance based on expectations of wholesale revenue growth in the high-single digits by the end of the winter selling season. Additionally, Canada Goose expects to open eight new retail stores as well as one new digital concept store.

For the next three fiscal years, Canada Goose expects average annual revenue growth of at least 20% and average annual growth in adjusted net income per diluted share of at least 25%.

However, Canada Goose said that it expects “materially larger losses” during the next quarter. The Company’s forecast is largely due to the number of operating stores during off-peak periods and higher corporate investments.