Canada Goose Holdings Inc T.GOOS

Third Quarter Fiscal 2022 and Revised Fiscal 2022 Outlook

[Betteryear2]

February 10, 2022 06:45 AM Eastern Standard Time

TORONTO--(BUSINESS WIRE)--Canada Goose Holdings Inc. (“Canada Goose” or the “Company”) (NYSE:GOOS, TSX:GOOS) today announced financial results for the third quarter ended January 2, 2022.

“Canada Goose’s brand momentum and supply chain resilience drove a strong performance in our largest quarter,” said Dani Reiss, President & CEO. “Our digital business continued to exceed last year’s outsized gains, alongside a sharp improvement in retail productivity. We remain confident in our long-term trajectory for revenue growth and margin expansion, notwithstanding the emergence of temporary and unexpected COVID-19 disruptions in certain markets.”

Third Quarter Fiscal 2022 Business Highlights (compared to Third Quarter Fiscal 2021)

• Total revenue increased by 26.5%, excluding $10.7m of temporary PPE sales in the comparative quarter. Including temporary PPE sales, total revenue increased by 23.6%.

• Total non-parka revenue increased by 74.9%, reflecting growing year-round lifestyle relevance.

• Global e-Commerce revenue increased by 28.1%.

• DTC revenue in Mainland China increased by 35.1%.

Third Quarter Fiscal 2022 Results (compared to Third Quarter Fiscal 2021)

• Total revenue was $586.1m from $474.0m. As fiscal 2022 is a 53-week year, the additional week included in the third quarter ended January 2, 2022 provided $40.9m of revenue.

• DTC revenue was $445.4m from $299.4m. The majority of the increase was driven by higher sales from existing retail stores, complemented by e-Commerce growth and retail expansion.

• Wholesale revenue was $136.7m from $160.8m. The decrease was a result of earlier order shipment timing relative to fiscal 2021, driven by wholesale partner requests.

• Other revenue was $4.0m from $13.8m. The decrease was attributable to temporary PPE sales in the comparative quarter.

• Gross profit was $413.8m, a gross margin of 70.6%, compared to $316.4m and 66.8%.

• DTC gross margin of 77.1%, compared to 77.9%. The decrease was driven by a higher proportion of sales in non-parka categories (-50 bps), higher duty costs (-50 bps), government payroll subsidies in the comparative quarter (-50 bps) and an unfavorable shift in geographic mix (-30 bps). This was partially offset by pricing (+120 bps).

• Wholesale gross margin of 50.2%, compared to 51.5%. The decrease was driven by government payroll subsidies in the comparative quarter (-190 bps) and unfavorable impacts from product mix due to higher sales in non-parka categories (-190 bps). This was partially offset by a higher proportion of sales to wholesale partners compared to international distributors (+100 bps) and pricing (+170 bps).

• Other segment gross profit was $1.6m from $0.3m.

• Operating income was $205.9m, an operating margin of 35.1%, compared to $153.3m and 32.3%.

• DTC operating margin of 57.4%, compared to 55.0%. The positive impact of revenue growth was partially offset by the decrease in segment gross margin.

• Wholesale operating margin of 35.6%, compared to 42.9%. The decrease in operating margin was attributable to lower gross margin and higher SG&A expenses.

• Other operating loss was $(98.5)m from $(80.4)m. The increase in operating loss was attributable to incremental SG&A expenses including $15.3m of investment in marketing, $7.9m of personnel costs and $5.1m in strategic initiatives including digital capabilities and the launch of Canada Goose footwear. This was partially offset by $14.5m of favorable foreign exchange fluctuations.

• Net income was $151.9m, or $1.41 per diluted share, compared to $107.0m, or $0.96 per diluted share.

• Non-IFRS adjusted EBIT was $206.9m, an adjusted EBIT margin of 35.3%, compared to $157.9m and 33.3%.

• Non-IFRS adjusted net income was $152.6m, or $1.42 per diluted share, compared to $111.9m, or $1.01 per diluted share.

• Cash was $407.6m as at quarter end, compared to $469.0m. During the year, 3,865,136 subordinate voting shares were repurchased for a total cash consideration of $187.3m.

• Inventory was $368.1m as at quarter end, compared to $339.0m.

https://www.businesswire.com/news/home/20220210005423/en/