Canada Goose Holdings Inc T.GOOS

TD

[retiredcf]

This analyst has never been a big fan of GOOS so is playing down this significant beat as much as she can. I'm sure I will be able to find more positive analysis. TD's target is $54.00. GLTA

Canada Goose

(GOOS-T, GOOS-N) C$50.41 | US$40.43

Q2/F22 Results: F2022 Outlook Raised, Yet H2/F22 Remains Key Event

• This morning, Canada Goose (GOOS) reported Q2/F22 results exceeding our forecast/consensus. Revenue of $233mm was ahead of our forecast/consensus of $205mm/$206mm. Adjusted EPS of $0.12 was ahead of our forecast/ consensus of -$0.07/-$0.09.

• F2022 guidance was increased, that we view as in line with expectations.

• Conference call is at 9:00 a.m. ET. Impact: NEUTRAL

• Q2/F22 Revenue: Total revenue of $233mm increased ~20% y/y.
   Wholesale revenue of $148mm increased ~25% y/y, vs. our forecast/ management's guidance of $130mm. The y/y improvement was due to earlier

  order shipment timing y/y.

   DTC revenue of $83mm increased ~80% y/y, compared to our forecast/ management's guidance of $72mm. This was driven by growth from existing stores, complemented by eCommerce and new stores opened in the LTM. Global eCommerce revenue increased ~34% y/y and momentum in Mainland China continued with revenue +86% y/y.

• Adjusted EBIT: Gross margin of 58% increased materially y/y yet was in line with our forecast. DTC gross margin declined y/y due to product mix weighted to non- parka categories. Wholesale gross margin increased y/y driven by lower sales to distributors and pricing. SG&A as a percentage of sales was well below our forecast and resulted in Adjusted EBIT ahead of our expectation.

• F2022 Guidance Increased: As illustrated in Exhibit 1, F2022 revenue guidance has been increased to $1.125-$1.175-billion vs. our forecast/consensus of $1.11/ $1.12-billion. Management provided a range for the Adjusted EBIT margin that we view as unchanged. Additionally, Adjusted EPS guidance of $1.17-$1.33 was provided that compares to our forecast/consensus of $1.21/$1.16 (range of $0.96- $1.45).

• Conclusion: Our first take on the results and outlook provided is neutral. The Q2/F22 beat is in the context of a seasonally less relevant quarter. The F2022 outlook has been raised, that we view as is in line with the current broad range of expectations. Additionally, the outlook continues to hinge largely on the H2/ F22 performance (~75% of revenue). This morning's release does not change our view that GOOS faces near-term challenges to its outlook including in its efforts to capture local demand in Asia. We will update our view following the conference call and review of the MD&A/financial statements.