GOOS:CC - Better Buy: Gildan Activewear Stock or Canada Goose Stock?
2023-12-19 16:00:00 ET
Canadians are cutting back, and just in time for the holidays. A recent survey by Bank of Montreal ( TSX:BMO ) found that anxiety over spending has hit a peak, with 30% of Canadians planning to cut back in 2024. The concerns come as the rising cost of living is only rising higher, with 82% expressing fear over future unknown expenses, 81% over their financial situation, and 61% over simply keeping up with monthly bills.
So, with such fear on their minds, the holidays have become a stressor rather than a celebration. About 58% of Canadians surveyed stated they would be using credit cards for holiday gifts. Furthermore, the average Canadian surveyed thinks it will take three months to pay back their holiday bills.
With all this in mind, where does that leave investors — especially at a time when companies such as Gildan Activewear ( TSX:GIL ) and Canada Goose Holdings ( TSX:GOOS ) should be doing well? Today, let’s take a look.
Gildan Activewear
Gildan stock recently hit the headlines, as the company made a major shakeup, sending their chief executive officer (CEO) out just before the holiday season after 20 years heading the company. The news sent shares absolutely plummeting after seeing some strong growth over the last year.
The company had an overall bullish view after it reported strong earnings results. Revenue growth could be limited in 2024 for the reasons given above. However, analysts believe the company should still reach 15% year over year in earnings-per-share growth.
While the company reported a 2% increase in revenue year over year during the quarter, it also lowered its EPS guidance. This was not a surprise, as the entire activewear industry is seeing less demand across North America.
Yet, while the company continued to see strong growth, plans for the future, and a solid balance sheet, the shakeup with the CEO was enormous — especially as there doesn’t seem to be a reason for the departure, though it was a decision by the board of directors. Shares are currently down 5% as of writing from the news of his departure. So, until more comes out, investors may want to sit on the sidelines of this stock.
Canada Goose
Then we have another top retailer . Canada Goose stock has had a rough few years through the pandemic. It didn’t look like it was going to stop any time soon, as the company was on the expansion path around the world, including huge openings in China.
However, the pandemic put a stop to that. Then, geopolitical issues with China further left the company in limbo. So, there have been other strategies the company continues to employ to get the growth it desperately wants to achieve.
One of these strategies has been through acquisitions. Canada Goose stock recently purchased European knitwear supplier Paolo Confectii to start a European expansion. Knitwear would be a new way forward for the company, though related to the company’s outwear line.
But honestly, there really weren’t any noteworthy share increases or decreases from the move. Until these growth moves can be seen in the numbers, it’s unlikely that Canada Goose stock will see much movement in share price.
For now, shares remain down 32% year to date as of writing. This has remained down even after recent news, as the company continues to slash full-year sales and earnings guidance. The global market remains challenging, and expenses are up. So, honestly, it’s unlikely we’re about to see more sales of the company’s famous coats at $995 a pop.
The post Better Buy: Gildan Activewear Stock or Canada Goose Stock? appeared first on The Motley Fool Canada .
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Gildan Activewear. The Motley Fool has a disclosure policy .
2023