2023-05-18 15:55:08 ET
Canada Goose Holdings ( NYSE: GOOS ) reversed course on Thursday, turning a double-digit percentage gain on the open into a double-digit percentage decline in afternoon trading.
The initial optimism came as the company topped Q4 earnings estimates and hiked full-year guidance. Additionally, the Canadian outerwear company highlighted a strong recovery in Asia-Pacific sales, aided by a return of Chinese consumer spending.
“Our stores in every market performed well with profit rebounding, especially in EMEA and APAC,” CEO Dani Reiss told analysts on Thursday. “Our business in China had a strong recovery from our third quarter in fiscal 2023 and has continued its momentum into fiscal year-to-date.”
That said, the company’s Q1 guidance came in slightly softer than expected. Management projected total revenue to fall in a range between C$70M and C$80M against a C$77.5M Street consensus. Meanwhile, an expected loss per share between C$0.89 and C$0.82 was far wider than the analyst expectation of a C$0.68 per share loss.
UBS analyst Jay Sole noted that the guidance also suggested a lower than expected EBIT margin for the year, which might not move sentiment which was bearish leading into the print. He added that “margin questions weigh on the stock” after a 420 basis point contraction in gross margins year over year and inventory remains stubbornly elevated. Inventory ended Q4 2023 at $472.6M as compared to $393.3M at the close of fiscal 2022.
Shares of Canada Goose ( GOOS ) dipped 10.23% shortly before the market close on Thursday.
More on Canada Goose:
Canada Goose Holdings Q4 2023 Earnings Call Transcript
Canada Goose: Resilient With Compelling Business Model
Canada Goose: Growth Strategy Looks Questionable
For further details see:
Canada Goose stock slides margin contraction, weak Q1 guide receive scrutiny