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Canada Goose Enters Its Season Firing On All Cylinders

Canada Goose just came off two consecutive quarters of double-digit topline growth. First half-year sales ending at the beginning of October are up 20% overall, reaching just over $250 million.

Considering these two quarters are its slower spring and summer seasons, this is a remarkable accomplishment and provides tailwinds heading into its prime selling season when about 70% of the company’s annual sales are made.

Adding fuel to the company’s fire is the opening this Saturday of its first Las Vegas store with three more U.S. locations coming by year-end. The U.S. has been a bright spot through the first two quarters, posting 27% year-over-year growth.

At the same time, the company signaled caution in its latest earnings report. The pandemic continues to cast a pall over sales in China, reported in its Asia-Pacific region, the company’s biggest revenue generator last year.

However, Covid restrictions are lifting. In the first quarter, Asia-Pacific revenues were off 28%, but only 4% in its most recent second fiscal quarter. And the company noted sales during October’s Golden Week were positive, and the lead-up to Singles Day on November 11 is going well too. Those numbers won’t be reported until next quarter.

Nonetheless, it’s cautious about the loss of momentum in China combined with mounting macroeconomic uncertainties. Consequently, year-end guidance was reduced to $870 million to $940 million from $940 million to $1 billion.

“China’s Zero-Covid policy makes it impossible to predict,” CEO Dani Reiss shared with me. “At the same time, people are concerned about a possible recession, stock market volatility and the geopolitical situation in Europe. We need to be transparent and responsible in our guidance.”

But he added, “Our business has grown through every recession – save the first wave of COVID – and this year will be no exception.” That’s saying something for a company that was founded in 1957.

Come what may in the short term, Reiss and his team are playing a long game with confidence the strategies in place will deliver the goods.

Shoring Up Asia

Last year Canada Goose’s Asia-Pacific region was its biggest money maker, accounting for 30% of its $805 million in sales. The U.S. was right behind with 27% of revenues.

The company doesn’t break out China separately, but given its size and growth potential, China is proving a headache now. However, Japan and South Korea are alleviating the pain.

“We couldn’t be more optimistic about both of these markets,” Reiss said.

In Japan, it formed a joint partnership with Sazaby League earlier this year. It covers operating retail stores, including flagships in Tokyo and Osaka with a Ginza store coming online soon, a national e-commerce site, and wholesale distribution across the country. The company expects Japan to contribute between $44 to $48 million by year end.

In South Korea, it’s signed a new distribution agreement with Lotte Group, which opened 14 new shops. Reiss reported the results have already exceeded expectations.

More Than Parkas

Canada Goose has been on a role expanding its year-round offerings, including footwear and what it classifies as its non-heavyweight down range of liteweight down, vests, jackets, knitwear, sweats and fleece.

Non-heavyweight fashion grew 46% year over year and now accounts for 44% of total sales, up from 36% prior year. Fleece, in particular, is a standout, with sales growth above 60%.

These expanded offerings help balance quarterly revenues, which vary widely not just corporately but within reporting segments. Third and fourth fiscal quarters are prime for direct-to-consumer sales, while wholesale’s season is the second and third quarters.

Wholesale revenues were bolstered this year by an increase in book order value and shipping orders earlier, which allows for potential reorders later in the season.

New Flocks Of Women

As it expands its product ranges, women get special attention through new collections and collaborations with Salehe Bembury and Angel Chen.

“Our first-ever, all-female branded campaign with live shopping events moved the needle for us in a big way to elevate the brand,” Reiss said.

Its women’s offerings currently account for about 50% of the business with the aim to increase it to 60%.

GenZ and Millennial women are its primary customers, giving it a long runway to build customer loyalty. And so far, more than 60% of its new female customers are first-time buyers.

Expanded Footprint

As important as the company’s digital presence for building brand awareness, aspiration and sales, its stores are where the magic happens. By the end of the year, Canada Goose will operate 50 stores, with four new stores in China opened so far this year, and this October, Osaka, Japan and Manchester, U.K. open.

Stateside, besides Las Vegas, there are planned openings for Cherry Creek, Denver and pop-ups in Detroit and Aspen. These are part of what the company calls its “Quest West” to deepen penetration in key markets across the western United States.

Guests at its Las Vegas store will be able to test products in its cold room reaching temperatures to -10° F and be treated to a daily snowfall in its Snow Room. And guests can admire an art collection from Inuit artist Gayle Uyagaki Kabloona entitled Uvagut, which means “All of Us.” Art is also featured in 45 other stores around the world.

Observing Canada Goose “takes immersive retail to the next level,” it was named to Forbes top 10 most consumer-centric retail brands in 2022.

Only Getting Better

Hearkening to the Beatle’s classic “Getting Better” – “I’ve got to admit it’s getting better (Better) A little better all the time” – Reiss said, “One thing I know to be true over the last 25 years is that October is better than September. November is better than October and December is bigger yet. That will be something that remains true this year.”

And with that he sees business only getting better in the next quarter and next year.