Dani Reiss is looking to push Canada Goose Holdings through the macroeconomic ills of the world by controlling what he can and focusing on growth — for now, in the U.S. as well as Japan and South Korea.
But there’s a lot that Reiss — chairman and chief executive officer of the firm founded by his grandfather, Sam Tick — just can’t control.
At the top of that list is China, where the country’s zero-COVID-19 policies have locked down consumers and kept them from shopping.
Accordingly, the company cut its outlook for the year, an unusual concession to the laws of retail gravity for the fast-growing parka-maker.
While reporting continued sales growth in its fiscal second quarter, the company reset its target for the year. Revenues are now slated to range from 1.2 billion to 1.3 billion Canadian dollars, down from the 1.3 to 1.4 billion Canadian dollars previously forecast. Adjusted net income per diluted share is now seen ranging from 1.31 to 1.62 Canadian dollars, down from the 1.60 to 1.90 projected earlier.
Investors took a cautious stance and sent shares of the company down 9.4 percent to $14.86 on Wall Street.
“There are headwinds everywhere, unfortunately, and China particularly, they have a zero-COVID-19 policy and that’s specifically impairing our brick-and-mortar locations,” Reiss told WWD.
That pain is not unique as other luxury brands have reported continuing weakness in China and stronger results elsewhere, particularly the U.S.
Reiss stressed that Canada Goose’s troubles in China were based in that market and not the brand.
“Whenever our brand is finding opportunity to shine and, we’ve seen it even in China in Golden Week when the consumer behavior was like normal, our brand did really really well,” the CEO said.
The company is also continuing to grow in broader Asia, with a joint venture in Japan that’s starting up and expansion in South Korea.
Canada Goose’s net income for the fiscal second quarter fell to 5 million Canadian dollars from 9.9 million Canadian dollars a year earlier. However adjusted net income rose to 23 million Canadian dollars from 14.1 million Canadian dollars.
Sales for the three months ended Oct. 2 increased 19 percent to 277.2 million Canadian dollars, a 22.3 percent rise in constant currencies.
Sales in Europe, the Middle East and Africa rose 34.4 percent while Canada was up 25.2 percent, the U.S. gained 20.3 percent and the Asia Pacific region logged a 4.2 percent decline.
The company’s direct-to-consumer has been growing with a 28 percent revenue increase outside of mainland China.
Reiss described it as a “very strong second quarter.”
He said of the U.S. and Canada, “Both have been very strong and we hope to see that continue into the third quarter and we hope that recessionary pressures or other talks of downturns and whatnot are not going to impair our business.
“We’re well positioned this year,” the CEO said. “We have all the inventory in all the right places and we’re ready.”
The world is not cooperating, but Reiss is sticking to his game plan — keep the brand pure by making and selling really warm jackets and other purpose-built fashions.
“We know our brand is strong,” Reiss said. “Canada Goose represents something unique in the world. We’re investing for the long term.”
And so, the company is marching out across the U.S. with new stores in Las Vegas, Nevada; Denver and Aspen, Colorado, and Detroit, Michigan.
Canada Goose also plans to continue its push in China.
“We are very long in China,” Reiss said. “We believe whatever is happening now is short term. We opened four new stores this year [in China] and we’re going to continue to be bullish on the market.
“Our focus is on the future,” he said.