Canada Goose Holdings Inc T.GOOS

TD

[retiredcf]

This is a flash report and their current target is $54.00. GLTA

Canada Goose

(GOOS-T, GOOS-N) C$44.25 | US$35.05

Launches Share Repurchase Program Event

This morning, Canada Goose (GOOS) announced that the TSX has approved an NCIB for up to ~5.9mm shares (~10% of the subordinate voting shares public float; ~5.4% of total shares outstanding).

Impact: SLIGHTLY POSITIVE

The company believes that the purchase of its subordinate voting shares under the NCIB is an appropriate and desirable use of available excess cash on hand, within its broader capital allocation strategy. GOOS has not repurchased any shares under an NCIB over the LTM.

Recall, GOOS ended Q1/F22 with <0.5x leverage (pre-IFRS 16). Prior to considering the NCIB, we forecast the balance sheet to be in a position of net cash by year end and into F2023 including investments in expanded distribution.

We anticipate management to be active with the NCIB. The shares have declined ~20% since the company reported Q1/F22 results on August 11 despite management maintaining its full-year F2022 outlook. However, as a result of the increased focused/penetration of the DTC channel anticipated this year, revenue inherently becomes further weighted to the H2/F22. We continue to view management's guidance as achievable, as illustrated by our F2022 financial forecast that is in line to slightly above F2022 guidance (>$1-billion in revenue).

Given the current state of the pandemic, our H2/F22 outlook is admittedly conservative. We will continue to assess the state of the pandemic; however, at this stage, an accelerated recovery may prove elusive in advance of the seasonally strong fall/winter selling periods. In advance of this recovery, the strength of GOOS' balance sheet leaves it positioned to fund growth, manage pandemic headwinds, and return capital to shareholders.