Canada Goose results thrive as luxury demand defies inflation
Published August 11, 2022
(Reuters) - Canada Goose Holdings Inc (GOOS.TO), on Thursday surpassed Wall Street targets for quarterly results after affluent consumers undeterred by decades-high inflation snapped up its luxury parkas and jackets.
Toronto-listed shares of the company rose about 3% as its second-quarter revenue forecast also came in largely above estimates.
Luxury companies from Ralph Lauren (RL.N) to Louis Vuitton owner LVMH (LVMH.PA) have seen little to no impact from rising inflation as higher-income customers travel and shop in earnest, spending the savings they had built up during two years of lockdowns.
"As of today, we've not seen any signs of slowing demand ... I continue to believe and expect that our business is going to stay on course for the rest of the year," Canada Goose Chief Executive Dani Reiss told Reuters in an interview.
COVID lockdowns and store closures in top luxury market China sent the company's Asia Pacific revenue down 6.3% to C$16.1 million ($12.63 million), but its stores in the country reopened towards the end of June.
Canada Goose is now experiencing pent-up demand in China and expects positive sales trends in the region going forward as consumers return to stores, Reiss said.
He added that it has not seen any impact to sales in Europe from a heat wave that swept across the region in mid-July.
The luxury consumer in general is taking advantage of getting to participate in social events again and Canada Goose is still a brand that has momentum across its segments, said Jessica Ramírez, senior research analyst at Jane Hali and Associates.
The company's revenue rose 24% to C$69.9 million in the first quarter, beating expectations of C$62.6 million, according to IBES data from Refinitiv.
Excluding items, it posted a loss of 56 Canadian cents per share, smaller than estimates of 61 Canadian cents.
($1 = 1.2748 Canadian dollars)