Canada Goose Shares Slide 20% on Missing Analyst Estimates

TORONTO, Ontario — Canada Goose Holdings Inc. dropped the most since it went public in 2017 after it reported quarterly revenue that missed analysts' estimates, reigniting concerns that the luxury parka maker's meteoric growth era is ending.

The company reported fourth-quarter revenue of C$156.2 million, below analysts' average estimate of C$158.9 million. That's the first revenue miss since Canada Goose went public in 2017. While adjusted profit beat expectations, the rare revenue miss may raise concerns about the demand for its products.

Canada Goose also said that revenue would rise at least 20 percent this fiscal year — less than analysts' 26 percent forecasts — and predicted eight new stores by the end of the winter selling season. Adjusted net income per share will rise at least 25 percent, also short of the 29 percent growth forecast from analysts.

Key Insights

Fourth-quarter gross margins of 66 percent beat analysts’ expectations, easing concerns that arose in February, when the impact of Ontario’s minimum wage increase took investors by surprise and sent the stock lower.

Canada Goose also updated longer-term guidance. It now expects margins before interest and taxes to grow by 100 basis point between 2019 and 2022 and average revenue growth of 20 percent.

Market Reaction

Canada Goose shares dropped 20 percent in Toronto to C$53.50 at 9:32 a.m., the biggest intraday decline ever. The company went public at C$17 in 2017.