Shares of Canada Goose (GOOS 1.96%) were gaining altitude on Thursday after the maker of high-end parkas and outdoor gear posted better-than-expected results in its fourth-quarter earnings report, paced by growing demand in the U.S. and China.
The stock closed Thursday's trading session 16.7% higher on the news.
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The Goose is loose
Canada Goose posted accelerating growth on the top line with revenue up 22% to $262.9 million, a significant improvement from single-digit growth earlier in the year, and easily beat estimates of $231.1 million.
Much of that growth came due to a jump in sales related to a higher number of friends and family sales as the company made an effort to sell off discontinued inventory.
Nonetheless, direct-to-consumer (DTC) sales were strong, up 21% to $199.4 million due to strong results in North America and the Asia-Pacific region, and DTC comparable sales were up 3.5%.
Wholesale revenue was down 9% due partly to planned optimizations of the wholesale business.
Gross profit rose to $171.1 million, and adjusted operating income jumped from $12.9 million to $17.3 million. On the bottom line, Canada Goose reported adjusted earnings per share of $0.14, up from $0.09 in the year-ago quarter.
CEO Dani Reiss said, "Our fourth-quarter results came in ahead of guidance, reflecting the power of our iconic brand and the disciplined execution of our strategy by our team."
NYSE: GOOS
Key Data Points
What's next for Canada Goose
Looking ahead, Canada Goose's guidance was modest as it's still knee-deep in a brand and strategy reset. Management said that revenue would grow in the low single digits in fiscal 2025, with DTC comp sales in the low single digits and a 20% decline in wholesale revenue as it scales back on that business. It also called for adjusted net income to grow in the mid-teens.
Additionally, management said it was withdrawing the long-term financial targets it announced last February "due to changes in business conditions including a more challenging consumer spending environment."
While that news may be disappointing, it seems like it was expected. Canada Goose still has work to do to make a full recovery, but its fourth-quarter results indicate the business is moving in the right direction. It's not surprising the beaten-down stock is moving higher on the news.
