Canada Goose Holdings Inc. (NYSE: GOOS), a maker of goose-down winter clothing, released quarterly and full-year earnings last week. The company’s revenue surpassed $1 billion for the first time. At the same time, the company’s stock is trading at a discount of more than 60% to its high, which some investors may consider a favorable opportunity to buy. Even for a premium brand, though, inflation poses extra dangers.
Canada Goose’s revenue exceeded $1 billion by the end of the previous year, setting a new sales record. The business now expects sales of $1.3 billion to $1.4 billion next year. GOOS has lots of space to expand in the future, especially physically.
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Despite the fact that the firm has been around for almost 60 years, its retail network is still small: only five outlets in the United States, four in Europe, ten in China, and nine in Canada. Canada Goose Holdings Inc. (GOOS) aims to establish 13 new stores in the upcoming fiscal year, since direct-to-consumer is the most profitable channel for the firm, with a gross profit margin of 76 percent.
China is one of the most potential markets, however, sales are now declining owing to store closures as a result of the new lockdown. However, in fiscal 2023, GOOS plans to grow its footprint in South Korea and Japan, two significant and key regions.
The introduction of new items, which will lessen seasonality in the company’s revenue, is a significant growth area for Canada Goose. That is, Canada Goose intends to market new items by leveraging the power of its brand. Non-jacket revenues increased by 70% in fiscal 2022, according to the statistics. The lightest down vests grew the most.
At the same time, Canada Goose Holdings Inc. (GOOS) claims that because its core product is in Canada, it is well shielded against supply chain issues. Due to the nature of the collection, Canada Goose sales will be lower throughout the summer months. However, the company’s business appears to be in good shape and capable of weathering big macroeconomic challenges.