Canada Goose caution on U.S. eclipses upbeat annual sales forecast
FILE PHOTO: The logo of Canada Goose is seen in a store in Manhattan, New York City, U.S., February 7, 2022. REUTERS/Andrew Kelly
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By Deborah Mary Sophia
(Reuters) -Canada Goose Holdings Inc on Thursday struck a cautious note on its business in the United States as luxury spending cooled in the market, overshadowing an upbeat annual sales forecast driven by a recovery in China and sending its shares down about 11%.
A reversal in the strict COVID-19 policies in China — a top market for luxury goods — has encouraged wealthy shoppers there to snap up everything from Cartier jewelry and Birkin bags, boosting sales at several high-end labels.
However, shoppers in the United States are putting a pause to a post-pandemic splurge on high-end clothing and accessories, with companies including ultra-luxury fashion houses like LVMH and Gucci owner Kering (EPA:PRTP) seeing sagging demand.
British luxury label Burberry on Thursday also noted there was a «challenge (in the U.S.) at the moment», with sales falling 7% in the Americas.
«We’re not being super ambitious for this year in the U.S…the market is going to be a little bit more challenging in the U.S. because of the macro economics,» Canada Goose Chief Financial Officer Jonathan Sinclair said on an earnings call.
Canada Goose, popular for its bright-red parkas and pricey puffer jackets, saw U.S. revenue decline 4.5% in the reported quarter.
«The U.S. customer is a little bit more apprehensive. They are more price conscious, especially now, and the luxury consumer is spending a lot less,» said Liza Amlani, principal at consulting firm Retail Strategy Group.
Canada Goose also forecast annual per-share profit in the range of C$1.20 to C$1.48, the midpoint of which was lower than estimates of C$1.46 per share, according to Refinitiv data.
Still, a 65.4% surge in Asia Pacific revenue, coupled with robust demand in Europe and Canada, helped the luxury winterwear maker beat expectations in its fourth-quarter results.
Toronto, Ontario-based Canada Goose said it expects fiscal 2024 revenue between C$1.40 billion ($1.05 billion) and C$1.50 billion, while analysts were expecting C$1.33 billion.
($1 = 1.3372 Canadian dollars)
