Canada Geese Latest Quarterly Report: Asian Market Sales Increased By 107.5%

In February 7th, Canada's high-end outdoor brand Canada Goose (Canada goose) released the key financial data in the third quarter of fiscal year 2019/2020 (last December 29th). The brand grew steadily in the same quarter, with net sales rising 13.2% to 452 million yuan over the same period. The adjusted net profit per share increased by 12.5% to 1.08 yuan over the same period.

Although the net sales of Canada Goose in Canada's domestic market dropped by 11.6% to 131 million yuan in the quarter, the growth rate in Asia was very strong, with net sales rising 107.5% to 94 million 700 thousand Canadian dollars over the same period.

In addition, in the tense social situation, the retail sales of Canada Goose in Hongkong, China have declined sharply, but in mainland China, it has achieved rapid growth, especially the electricity business and passenger traffic volume has achieved strong growth. During the "double eleven" and "double 12" shopping festivals, Canada Goose became one of the best selling brands of Tmall luxury platform Luxury Pavilion.

Dani Reiss, chief executive of Canada Goose, said: "we achieved strong growth in the last quarter, especially in the global market. Online offline stores enjoy excellent customer flow and customer participation. Although the new crown virus epidemic has brought some uncertainty, we believe in the company's strategy and long-term development potential. "

Affected by the new crown virus epidemic, Canada Goose downgraded the company's 2020 financial year's full year forecast. Canada Goose believes that the epidemic will cause a serious decline in passenger traffic and trading volume. The online and offline business in the fourth quarter of the Greater China region is likely to decline, and some destinations in North America and Europe will also be affected. Canada Goose expects net sales in fiscal 2020 to grow 13.8%-15.0% to 945 million -9.55 billion yuan over the same period last year (previously expected to grow at least 20% over the same period last year). After adjustment, net profit per diluted share increased 0.7% or 2.2% to 1.33-1.37 Canadian dollar (previously expected to grow at least 25% over the same period last year) after adjustment.

Dani Reiss said in a conference call, "first of all, we would like to extend our sincere greetings to all those infected with the virus. We will work together with all the people in China and other regions to deal with the outbreak. Canada Goose donated 1 million yuan to the Wuhan Charity Federation. Dani Reiss also mentioned that although the supply chain end will be affected in the long run, the buffer stock set up by the company last year can play a mitigating role to a certain extent.

On the day of the news, Canada Goose shares fell 4.38% to 31.84 dollars on February 7th.

As of December 29, 2019, the key financial data for the third quarter of the Canada Goose 2019/2020 fiscal year are as follows:

Net sales increased 13.2% to 452 million Canadian dollars.

Gross profit is 298 million Canadian dollars, gross profit margin is 66%.

Adjusted EBIT (pre tax profit) was 164 million Canadian dollars.

Adjusted net profit per share increased by 12.5% to 1.08 yuan over the same period last year.

By channel:

Direct sales: net sales increased 28.9% to 302 million Canadian dollars.

Wholesale: net sales fell 8.1% from last year to 150 million Canadian dollars.

By Region:

Canada: net sales fell 11.6% from last year to 131 million Canadian dollars.

Us: net sales increased 10% to 143 million Canadian dollars.

Asia: net sales increased 107.5% to 94 million 700 thousand Canadian dollars.

Europe and other regions: net sales increased 11.9% to 84 million yuan.

As of March 29, 2020, the Canada Goose 2019/2020 fiscal year is expected to be as follows:

Net sales grew by 13.8%-15.0% to 945 million -9.55 billion yuan (previously expected to grow at least 20% over the same period last year).

The adjusted EBIT rate dropped by 2.8-3.3 percentage points to 21.6%-22.1% compared to the previous year (previously expected to grow 0.4 percentage points over the same period).

Adjusted net profit per share increased 0.7% or 2.2% to 1.33-1.37 Canadian dollar (previously expected to grow at least 25% over the same period last year).

Wholesale channel net sales growth rate of 9.0%-11.0% (previously expected to increase the number of units).

(currently 1 Canadian dollars, about 5.26 yuan).