Canada Goose Holdings Inc. is navigating challenging waters as it adjusts its fiscal year earnings outlook due to macroeconomic pressures. The luxury parka retailer’s shares have witnessed an 11-day consecutive decline, marking an unprecedented streak.
On Wednesday, the stock hit a fresh intra-day low at C$13.60 ($9.80) following the company’s revision of its fiscal year total revenue forecast. The revised range now stands between C$1.2 billion and C$1.4 billion, falling short of the C$1.42 billion that analysts had, on average, anticipated. Notably, this adjustment brought the company’s previous range of C$1.4 billion to C$1.5 billion down a notch.
In response to what the company termed a «challenging retail environment,» management also slashed the lower end of the earnings expectations to a range of C$0.60 and C$1.40 per share. Canada Goose managed to outperform expectations by earning an adjusted C$0.16 per share, surpassing the anticipated loss of C$0.22 per share by Bloomberg analysts.
Mark Petrie, an analyst at CIBC Capital Markets, noted that management did not provide any insights into October trends, but he anticipated that the momentum slowdown would persist.
October posed a significant challenge for Canada Goose, with shares declining by approximately 23%. Weaker economic reports in China, a key market for the retailer, raised concerns about the company’s sales. Analysts also expressed reservations about warmer-than-usual winter weather forecasts, leading firms like TD Securities and Wells Fargo to downgrade the retailer’s shares.
In addition to the adjustment in forecasts, the company announced a change in its leadership team. Neil Bowden will step into the role of chief financial officer, transitioning from his position as deputy CFO, effective April 1, 2024. The current CFO, Jonathan Sinclair, will assume the role of president of the Asia Pacific operations.
In response to these developments, shares fell by as much as 11.6% in early Toronto trading on Wednesday.