TORONTO - Canada Goose Holdings Inc . (NYSE:GOOS, TSX:GOOS) reported better-than-expected third quarter earnings on Thursday, sending shares up 5% as the luxury outerwear maker navigated a challenging macroeconomic environment.
The Toronto-based company posted adjusted earnings per share of C$0.05, beating analyst estimates of a C$0.04 loss. Revenue came in at C$267.8 million, significantly surpassing the consensus forecast of C$186.74 million. However, total revenue decreased 5% YoY, or 6% on a constant currency basis.
Direct-to-consumer (DTC) revenue fell 5% to C$103.9 million, with comparable sales declining 13%. Wholesale revenue dropped 15% to C$137.3 million due to a planned lower order book as the company aims to elevate its wholesale presence. Other revenue rose C$16.9 million to C$26.6 million, primarily from clearing slow-moving inventory.
"Our second quarter performance reflected steady progress across our operating priorities, as we navigated an increasingly challenging macro environment that affected consumer sentiment," said Dani Reiss, Chairman and CEO of Canada Goose.
Gross margin contracted to 61.3% from 63.9% a year ago, mainly due to a higher proportion of non-Heavyweight down revenue in the product mix. The company ended the quarter with inventory of C$473.4 million, down 9% YoY.
Canada Goose opened two new standalone stores and converted two temporary stores to permanent locations during the quarter, bringing its total permanent store count to 72. The company also launched a live shopping channel on Chinese platform Douyin to engage with consumers in a key market.
Looking ahead, Canada Goose remains focused on improving overall business performance and building a foundation for sustainable, long-term profitable growth. The company is set to launch its first capsule collection from Creative Director Haider Ackermann in late November.
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