Canada Goose increased revenues and reduced losses last quarter, a sign the company’s multiyear drive to widen its luxury assortment and tighten cost controls is working.
For the first quarter ended June 28, total revenue increased 10.3 percent to $118.9 million from $107.8 million, up 8.6 percent on a constant currency basis. All figures are expressed in Canadian dollars, except for per share prices, which are in U.S. dollars.
The operating loss narrowed to $103.8 million compared with $158.7 million in the prior-year period, which executives attributed to higher gross profit and lower expenses across the board.
The net loss was $90.8 million, or 93 cents a share, compared with $125.2 million, or $1.29 per share, a year ago.
Adjusted earnings before interest and taxes tallied $103.8 million, down slightly from $106.4 million a year earlier.
Gross margin was 62.4 percent compared with 61.4 percent in the year-ago period, reflecting favorable channel mix and region mix.
“I feel really good about the first quarter,” Dani Reiss, chairman and chief executive officer of Canada Goose, told WWD on Thursday. “The first quarter is the smallest of the year, but our initiatives are playing out really well. The top line was good and the margins came in strong as well.
“Apparel, rainwear and windwear have started to see great traction more recently,” Reiss said. “These categories represented nearly 40 percent of our revenues last quarter, as much as the entire company generated eight years ago in the quarter. Five years ago, those categories represented just 5 percent of the business. By last year, they had grown to 15 percent of annual revenue and they continue to expand. Diversity has been successful, and it’s been without losing sight of who we are, our DNA, and growing the core,” which is outerwear. Rainwear was introduced in 2015, knitwear in 2017, and windwear in 2020. Within apparel, fleece knitwear shirts and bottoms have been standouts.
Asked if additional new products or categories were being tested, Reiss said, “We do have some new categories in the works that aren’t on the shelves yet. You’ll have to wait until fall to see some new stuff.”
Dani Reiss
While the quarter performance was generally good, “Store traffic in North America was not where we liked it, but that’s not an indicator of brand health,” Reiss said. “Conversion in stores has increased. The execution in the stores is much better and products are resonating better.” The decline in store traffic, he said, was due to macroeconomic conditions.
Direct-to-consumer revenue increased 8.6 percent to $84.8 million, due to a stronger performance in Asia-Pacific and North America. DTC comparable sales declined 3.2 percent primarily reflecting softer comparable-store sales, partially offset by double-digit e-commerce growth.
Wholesaling was among the bright spots last year, as revenue increased 66.5 percent to $29.8 million, driven by strong orders and reorders, Reiss said. “Spring 2027 orders coming in now are very strong.”
He cited Nordstrom, Bloomingdale’s, Holt Renfrew and Harry Rosen as among the top accounts.
The Toronto-based company projects full-year revenue up low-single digits and adjusted EBIT margin in the range of 11 to 12 percent.
Reiss said the company is carefully monitoring the tariff situation, but does not expect to see a material impact from U.S. duties announced July 20 and scheduled to take effect Aug. 19. Prices on some Canada Goose products will be affected and if the duties are implemented as proposed, and assuming no mitigating actions were taken, Canada Goose estimates that the impact to this year’s operating margin would be less than 200 basis points.
Canada Goose opened four stores during the quarter, bringing the store count to 92. This included a new Vancouver location, which showcases the brand’s latest design.
In other statistics, inventory rose 11 percent from a year earlier to $489.9 million at the end of the quarter, reflecting an expanded product assortment, a larger wholesale order book, and planned production growth to support anticipated demand for fall ‘26. SG&A expense decreased 21 percent year-over-year.
During a conference call with industry analysts and investors, Reiss said, “We delivered revenue growth of 9 percent driven by strong demand for our expanding lifestyle product offering, including apparel, rainwear and windwear. We also achieved healthy gross margin expansion in the season with a greater mix of spring-summer categories, while higher channel margins and disciplined cost management further supported profitability. Together, these results demonstrate that the strategic investments we have made over the past several years are translating into stronger financial performance, as planned.”
The CEO cited three priorities for this fiscal year: to deepen brand desire through more effective marketing and translate that into increased demand, scale a repeatable product playbook across seasons and drive greater year-round relevance, and improve channel productivity and capital efficiency.
The brand’s bottom-line loss of 64 cents a share was a bit more than the Zacks Consensus Estimate of 63 cents, but the quarter’s revenues of $85.9 million surpassed the Zacks Consensus Estimate. By late morning Thursday, Canada Goose’s stock price was up 0.8 percent to $9.32.
