Canada Goose Holdings (NYSE:GOOS) reported earnings results that showed e-commerce sales up 80%, which lifted total revenue up 115% year over year, but it wasn’t enough. The company posted a wider net loss than expected, which stole the narrative of the quarter.
The stock was down 13.2% at 12:37 p.m. EDT on Wednesday, while year to date the stock is up 32% and has significantly outperformed the broader market as measured by the S&P 500 index.
The company seems to be enjoying healthy momentum right now, as noted by the strong top-line performance. Lower COVID-19 restrictions and new retail expansions drove direct-to-consumer revenue up to $29.4 million from $10.4 million in the year-ago quarter. Despite more people visiting brick-and-mortar stores this year, Canada Goose still posted stellar e-commerce growth.
However, investors were more focused on the wider operating loss of $60.7 million compared with $59.3 million in the year-ago quarter. The company experienced higher marketing spending and investments in strategic initiatives, along with higher performance-based compensation expense and unfavorable foreign exchange fluctuation.
All in all, it’s difficult to call the quarter disappointing. CEO Dani Reiss called it a “great start” to the year.
Market participants might have been looking for a raise to management’s full-year outlook, which contributed to the stock’s post-earnings sell-off, but that shouldn’t concern long-term investors. Management’s guidance for fiscal 2022 calls for revenue to exceed $1 billion. This assumes that direct-to-consumer revenue approaches 70% of total revenue.
The company has a catalyst on the horizon with its upcoming footwear launch, not to mention the prospects of accelerating momentum heading into the colder season and holidays.
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