TORONTO – Canada Goose Holdings Inc.‘s third-quarter profit ticked higher as the company worked to make its operations “more flexible and nimbler,” but warned of headwinds materializing in China.
The luxury parka maker revealed Thursday that its profit attributable to shareholders amounted to $139.7 million or $1.42 per diluted share for the quarter ended Dec. 29.
The result compared with a profit of $130.6 million or $1.29 per diluted share a year earlier.
The company has spent months “ruthlessly focused on prudently managing” headcount and costs, said Beth Clymer, Canada Goose’s president of finance, strategy and administration.
“This required new ways of working across our organization,” she said.
One of the ways was moving to manufacturing small quantities of main line product during the season in response to consumer demand signals.
For example, a run of the company’s popular fleece Chilliwack bomber was begun in Winnipeg, when interest piqued in the sweater recently.
The company also sped up timelines when it launched its capsule Snow Goose collection from creative director Haider Ackermann.
“These products included new fabrics, trims, and design features, yet we brought them from design conception to consumers in record time,” Clymer said.
She pointed out the job was also done with a smaller workforce because Canada Goose laid off 17 per cent of its global corporate staff last March.
At the time, CEO Dani Reiss promised the cuts would put the company in a better position for scaling and help it focus on efficiency and key brand, design and operational initiatives.
“This is about being simpler and more effective,” Clymer reiterated Thursday.
Her remarks came as the company said it now expects low single-digit percentage to no growth for its adjusted profit per share for the year. Earlier expectations had been for a mid-single-digit percentage increase.
Its share price on the TSX fell almost six per cent to $14.41 in late-morning trading as the market responded to the lower guidance and news that the company’s third-quarter revenue totalled $607.9 million, down from $609.9 million.
About a third of the revenue came from Greater China, which Carrie Baker, president of brand and commercial, said is “one of the company’s healthiest markets” because of its strong brand awareness.
The company has poured resources into Asia over the last several years, opening a rash of new stores in the market and recently launching live shopping on Douyin, a short video app from TikTok owner ByteDance.
The moves paid off, delivering strong sales during the recent Lunar New Year and Golden Week, the period of Asian holidays earlier in the year.
Yet Baker said Hong Kong, Macau and Taiwan are facing macroeconomic pressures and some stores in parts of Asia are seeing lower traffic levels.
Its third-quarter Greater China revenues fell 4.7 per cent, when compared with a year earlier.
“It’s still a tough market, but we’re seeing the momentum in the places that we are investing in,” Baker said.
Retailers in China are facing headwinds because the U.S. recently decided to implement a 10 per cent tariff on goods from the country. Canada Goose may also be impacted by 25 per cent tariffs the U.S. has threatened to impose on Canadian goods in a month.
While Canada Goose did not face questions from analysts about the tariffs on Thursday, the company told The Canadian Press over the weekend that “tariffs will not change our path.”
It noted 70 per cent of its products are manufactured within seven facilities in Ontario, Manitoba, and Quebec and said the company employs about 20 per cent of the country’s “cut and sew industry.”
“We remain steadfast in our commitment to producing world-class products right here,” the company said Sunday.
This report by The Canadian Press was first published Feb. 6, 2025.
Companies in this story: (TSX:GOOS)
