Canada Goose Holdings Inc. on Wednesday warned that the negative financial impacts of the coronavirus will be more obvious in its first-quarter earnings for the period ending June 28.
In a Nutshell: The luxury outerwear firm said its upcoming first-quarter report will include a “negligible level of revenue” because of the coronavirus impact. The quarter is historically its smallest in the fiscal year, and represented just 7.4 percent of annual sales in fiscal 2020, which ended on March 29, Canada Goose said Wednesday.
Most nonessential retailers in North America began temporarily closing stores in mid-March to help stem the spread of the virus, which would coincide with the last week or two of Canada Goose’s fourth quarter.
As for the current read on first-quarter activity, Canada Goose said that during the first seven weeks of the reporting period for fiscal 2021, 75 percent, or 15 out of 20 retail stores in the direct-to-consumer channel, were temporarily closed. Two of the five stores that were open, both in Hong Kong, “have been severely impacted by restrictions on inbound tourism,” the company said. The Paris store reopened on May 20, followed by Milan on May 29 and Montreal on June 2. Other store reopenings are being evaluated based on local guidelines and “supporting traffic trends,” the company added.
Net Sales: For the three months ended March 29, revenues slipped 9.8 percent to 140.9 million Canadian dollars ($104.4 million) from 156.2 million ($115.8 million).
“While e-commerce is operational in all markets and digital engagement is strong, this off-season period is a low point for consumer purchasing online. In the wholesale channel, shipments to partners have been largely shut off since March due to disruptions from retail store closures,” Canada Goose said.
For the year, revenues were up 15.4 percent to 958.1 million Canadian dollars ($710.0 million) from 830.5 million Canadian dollars ($615.5 million).
Earnings: Net income for the quarter increased 21.7 percent to 7.3 million Canadian dollars ($5.4 million), or 2 Canadian cents ($0.015 cents), from 6 million Canadian dollars ($4.4 million), or 8 Canadian cents ($0.06 cents).
For the year, net income rose 7.1 percent to 154.5 million Canadian dollars ($114.5 million), or 1.36 Canadian dollars per diluted share, ($1.01), from 144.2 million Canadian dollars ($106.9 million), or 1.28 Canadian dollars ($0.95), a year ago.
Due to ongoing global uncertainties connected to COVID-19, Canada Goose said it was not providing any outlook for fiscal 2021.
CEO’s Take: “We are actively and strategically managing through this temporary period of global uncertainty and delivering against key priorities for the business,” Dani Reiss, president and CEO, said.