Canada Goose Holdings Inc T.GOOS

Alternate Symbol(s): GOOS

Consumer Cyclical Luxury Goods

Canada Goose Holdings Inc. is a Canada-based lifestyle brand and a manufacturer of performance luxury apparel. The Company designs, manufactures, and sells performance luxury apparel for men, women, youth, children, and babies. The Company’s product offerings include various styles of parkas, lightweight down jackets, rainwear, wind wear, apparel, fleece, footwear, and accessories for the fall, winter, and spring seasons. It operates through three segments: Direct-to-Consumer (DTC), Wholesale, and Other. The DTC segment comprises sales through country specific e-commerce platforms available across numerous markets, which includes the recommerce platform Canada Goose Generations, and Company-owned retail stores located in luxury shopping locations. Its Wholesale segment comprises sales made to a mix of retailers and international distributors. It has its operations in Canada, the United States, North America, Asia Pacific and Europe, the Middle East, Africa (EMEA).

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Canada Goose Holdings Inc

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Post by retiredcfon Nov 13, 2021 3:13pm

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TD Report

Remembering of course that he wasn't a fan and only reluctantly increased his target a few weeks ago. Now he's already behind the 8 ball. GLTA

Canada Goose

(GOOS-T, GOOS-N) C$60.78 | US$40.43

Q2/F22 Results: Guidance Revisions Provide Overstated Relief Event

This morning, Canada Goose (GOOS) reported Q2/F22 results and provided updated F2022 guidance that exceeded our forecast/consensus.

Impact: SLIGHTLY POSITIVE

Q2/F22 Summary: In a transitional period for GOOS, revenue was ahead of our forecast/consensus. eCommerce (+34% y/y) and momentum in Mainland China (DTC revenue +86% y/y) continue to be the main drivers of the top-line. Store traffic is improving, yet productivity remains below pre-pandemic levels. The shift in channel mix to DTC drove gross margin improvement as anticipated. Operating leverage within SG&A resulted in the EPS beat versus our forecast.
Updated Outlook Provides Relief: Admittedly, we had initially underestimated the positive implications of management's updated guidance. Fundamentally, we view the revisions as slightly positive, as illustrated by our H2/F22 EPS outlook that remains relatively unchanged. At the mid-point of management's guidance, we highlight that EPS remains below pre-pandemic levels.
The reaction in the share price today in our view is likely more so related to investors breathing a sigh of relief in the face of global COVID-19 disruptions, headwinds to global luxury growth, and even supply chain concerns. We expect the shares could pull-back modestly as fundamental investors digest the outlook. We believe the current share price reflects fair value over our forecast horizon should GOOS continue to execute.
Investment Thesis: We maintain our view that GOOS faces near-term challenges to capturing local demand. Indications of retail traffic exceeding pre-pandemic levels and/or an accelerated global luxury recovery would be required to become more constructive with our H2/F22 and F2023 outlook. Despite near-term headwinds, the balance sheet should enable management to continue to expand its physical and digital footprint. Upon a return of international tourism/traffic, GOOS should be well positioned to leverage its expanded DTC presence. Given the noted headwinds and the current valuation, we prefer growth stories within our coverage universe with arguably lower execution risk.

TD Investment Conclusion

We are maintaining our HOLD recommendation. Our target price increases to $60.00 based on our revised F2023 EPS forecast.