In its first financial report as a public company, the brick and mortar and online retail business of Canada Goose registered impressive results which even beat the estimates that had earlier been put out by analysts. Consequently, the shares of the Toronto, Canada-based apparel and accessories maker appreciated by over 16% as a result of a 22% increase in revenue in the fourth quarter. Revenue recorded for the quarter that ended on March 31 was $51.20 million.
The apparel and accessories maker which has one retail store in New York and another one in Toronto registered $23.4 million in net losses. This was about 23 cents a share. Analysts were expecting $31.25 million in revenues and a 19 cents a share loss. A year ago, the net loss was 9 cents a share or $9.2 million.
Sales made at the apparel maker’s online store as well as in its two locations in Toronto and New York increase by over 174% to reach $36.4 million. There has been an increase in direct-to-consumer sales and they now account for approximately 28.6% of total sales. Two years ago they consisted of less than 5% of sales. A year ago they were 11%. This figure is expected to increase even more as the apparel maker grows its online presence and launches more brick and mortar stores across the globe. It will eventually account for about 50% of the combined sales over time.
“Not only has (direct-to-consumer saels) driven higher margin expansion due to higher profitability versus wholesale, it also enables us to engage directly with customers for a rich brand experience which is presented through our own filter,” said Dani Reiss, the chief executive officer of Canada Goose said.
Diversification and expansion
Though it focuses mostly on apparel suited for the cold weather, Canada Goose has been diversifying by unveiling new products that will appeal to shoppers throughout the year. In this regard, strong performance was recorded in the spring collection of the apparel maker.
Canada Goose will also be opening new stores in new locations such as Chicago and London later in the year. At the same time the apparel maker will be aggressively pursuing the European markets through its online business. Currently, Canada Goose operates online stores in France, the United Kingdom and North America but will be adding seven new online stores in new European markets. This includes the Netherlands, Luxembourg, Belgium, Ireland, Germany, Sweden and Austria.