Canada Goose revenues continue to be hit by COVID-19 disruptions

Canada Goose has reported a 1.6% drop in revenue to £352.8 million ($576.7 million) for the third quarter ending 1 January 2023, reflecting the "timing of wholesale shipments and lower revenue in Mainland China related to COVID-19 disruptions".

Direct-to-consumer revenue increased 1.5% to £275.5 million ($450.2 million), largely driven by continued retail store expansion. Canada Goose had 51 permanent stores at the end of Q3 2023, compared to 41 permanent stores at the end of the comparative quarter.

Wholesale revenue declined 17.3% to £70 million ($114.4 million), attributed to earlier shipments in Q2 2023.

Revenue in the US grew 11.3%, but decreased 6.8% and 9.3% in Canada and EMEA respectively. This was due to the timing of wholesale shipments and lower e-commerce performance, partially offset by increased sales within existing stores.

Gross profit increased 0.6% to £254.8 million ($416.4 million), whilst gross margin grew 160bps to 72.2%. This was favourably impacted by pricing, partially offset by higher duty costs and product mix from a lower proportion of parka sales.

Adjusted EBIT decreased 3.9% to £120.6 million ($197.1 million), due to higher costs related to investment in technology, opening new stores and running stores at full capacity except Mainland China and foreign exchange fluctuations, partially offset by higher gross profit and the timing of marketing spend which occurred earlier in the year compared to FY22.

Looking ahead, Canada Goose has lowered its guidance because of "worse than expected COVID-19 disruptions in Mainland China and slowing momentum in North America against a challenging macro-economic environment". It expects revenue to reach £152-£165 million ($251-$271 million) in Q4.

Dani Reiss, Chairman and CEO of Canada Goose, said: "We were pleased with accelerating growth in Mainland China toward the end of the quarter and continue to see promising signs of a strong local rebound to date.

|However, for most of the third quarter which includes December, our busiest month of the year, our performance was impacted by worse than expected COVID-19 related disruptions in Mainland China. This, combined with recent slowing momentum in North America set against a tough macro-economic backdrop, has led us to revise annual guidance. We believe these challenges are temporary and our brand strength and strategy position us well to drive profitable growth."