After sales decline in the second quarter, Canada Goose lowers forecasts

Business

Canada Goose store in Tokyo. Credits: Canada Goose/Business Wire

Clothing retailer Canada Goose Holdings Inc. suffered a slight decline in sales in the second quarter of the 2024/25 fiscal year. Profits only rose due to special factors, leaving management more cautious for the rest of the year.

According to an interim report published on Thursday, sales in the three months up to September 29 amounted to 267.8 million Canadian dollars. This represents a decrease of 4.7 percent compared to the same quarter last year. Adjusted for exchange rate changes, revenues shrank by 6.3 percent.

Losses in North America and Europe weigh on sales development

In North America, the company suffered a decline of 2.4 percent (-3.1 percent adjusted for currency effects) to 121.1 million Canadian dollars. In the EMEA region, which includes Europe, the Middle East, Africa and Latin America, sales fell by 13.5 percent (-16.8 percent adjusted for currency effects) to 80.6 million Canadian dollars.

In contrast, the Asian-Pacific region saw an upturn. Revenues there rose by 3.6 percent (+3.0 percent adjusted for currency effects) to 66.1 million Canadian dollars. This was mainly due to a solid increase in Greater China, where sales rose by 5.7 percent (+5.2 percent adjusted for currency effects) to 46.4 million Canadian dollars.

Net profit increases due to restructuring costs in year prior

In addition to the decline in sales, a lower gross margin meant that operating profit shrank by around 30 percent to 1.6 million Canadian dollars despite extensive cost-cutting measures.

The reported net profit attributable to shareholders increased from 3.9 to 5.4 million Canadian dollars. However, the increase was due to the fact that high restructuring costs had burdened the result in the previous year's quarter. On an adjusted basis, the surplus fell from 16.2 to 5.2 million Canadian dollars.

Management is more cautious about the rest of the year

In light of recent developments, management has adjusted its annual forecasts. While it had previously expected sales growth of a low single-digit percentage for 2024/25, it now also considers a slight decline to be possible.

The company is also more cautious with regards to earnings development. Previously, the company had targeted an increase in diluted earnings per share adjusted for special items by a percentage in the mid-teens range, but now only an increase in the mid-single digits is expected.

This article originally appeared on FashionUnited.DE. It was translated to English using an AI tool called Genesis and edited by Rachel Douglass..

Canada Goose