Canada Goose beats sales expectations as China demand thrives, US recovers

By Deborah Mary Sophia

(Reuters) -Canada Goose Holdings beat Wall Street estimates for quarterly revenue on Thursday, bolstered by a strong rebound in China demand and a recovery in the U.S. market from choppy sales in recent months.

Demand for luxury goods in China has rebounded sharply after the country lifted its COVID-19 restrictions. Sector players such as LVMH and Ray-Ban maker EssilorLuxottica logged strong performances in the market in recent quarters.

Revenue from Canada Goose’s Asia Pacific segment jumped 52.2% to C$24.5 million in the first quarter ended July 2, building on a 65.4% surge seen in the previous quarter.

Sales in the United States has also recovered following a slump earlier, signaling that demand among wealthy Americans had remained strong, even if the post-pandemic luxury splurge had started to sag.

“Out of all of what we’ve seen in luxury sector earnings so far, Canada Goose seems the most positive in the U.S.,” said Jessica Ramírez, senior research analyst at Jane Hali & Associates.

Still, Canada Goose forecast current-quarter sales below estimates and projected an adjusted net loss per share of between 24 Canadian cents and 17 Canadian cents, compared with estimates for a profit of 6 Canadian cents.

“I think (the forecast) is conservative and it makes sense… because of the volatility that we still have going on in the market, particularly in the U.S.,” Ramírez said.

Shares of the company were up marginally in premarket trading.

Toronto, Ontario-based Canada Goose sees second-quarter revenue of C$270 million to C$290 million, below estimates of about C$298.5 million.

Its revenue rose 21% to C$84.8 million ($63.44 million) in the first quarter, beating Refinitiv estimates of C$75.4 million.

It posted an adjusted per-share loss of 70 Canadian cents, smaller than a loss of 86 Canadian cents expected by analysts.

($1 = 1.3368 Canadian dollars)