Canada Goose shares down despite higher sales as loss, margins widen

On an adjusted basis, Canada Goose says it lost 21 cents per share compared with an adjusted loss of 15 cents per share a year ago. (File Photo: Canada Goose/Facebook)

TORONTO — Shares of Canada Goose Holdings Inc. fell as much as 10 per cent Wednesday as it reported a wider loss and worsened margins in its first quarter compared to a year earlier.

The luxury parka company reported a loss of $29.4 million or 27 cents per share for the quarter ended June 30 compared with a loss of $18.7 million or 17 cents per share a year ago.

On an adjusted basis, Canada Goose says it lost 21 cents per share compared with an adjusted loss of 15 cents per share a year ago.

The results beat analyst expectations for a loss of 24 cents per share, according to financial markets data firm Refinitiv.

However, the company said sales of its lighter weight apparel, which carries a lower price point than its pricey feathered parkas, comprised a bigger portion of revenue during the quarter. It saw its gross margin slip from 64 per cent for the quarter last year to 57.5 per cent in the quarter as its non-parka sales nearly doubled to roughly a third of sales.

“We reached a major milestone in the evolution of our offer of strong contributions from lightweight down, knitwear and rainwear,” company chief executive Dani Reiss said on a conference call with analysts.

The growth of the lower cost offerings gives the company a more year-round market, but also comes with generally lower margins on sales.

Revenue in what was its first quarter totalled $71.1 million, up from $44.7 million.

The company says revenue in Canada rose 40.4 per cent, while sales climbed 15.8 per cent in the United States and 79.7 per cent in Europe and the rest of the world.

Revenue in Asia nearly tripled to $18.1 million from $6.6 million due to earlier shipments to international distributors in Japan and South Korea, and the contribution of operations in China.

The company maintained the fiscal outlook it had issued in the previous quarter.

Canada Goose shares closed down $3.81, or 6.67 per cent, at $53.31 on the Toronto Stock Exchange.