Canada Goose’s Dani Reiss on the Coronavirus, Brand Heat and Retail
Canada Goose Holding’s growth track has been hit by the coronavirus — at least for now.
Dani Reiss, president and chief executive officer, told WWD that while the brand’s business in China has hurt its outlook, the results from the last quarter were strong and the long-term trajectory is still good.
In the meantime, Wall Street adjusted its view. Shares of the Canadian outerwear maker were down 4.4 percent to $31.84 in trading Friday. Third-quarter results showed continued expansion, but the outlook was pared. The company is now projecting annual revenue growth of 13.8 to 15 percent, which implies a top line of 945 million Canadian dollars to 955 million Canadian dollars, and is down from the prior forecast calling for “at least 20 percent” growth.
“It’s a major near-term headwind for us and for everyone in the business,” Reiss said of the virus outbreak.
Chinese shoppers are staying home to safeguard their health, which hurts both local retail and stores in international shopping destinations, which are now inaccessible for many given canceled flights and travel restrictions.
Canada Goose makes its products in Canada, where it is consolidating its production and taking more in house, but it does rely on a global supply chain for inputs. However, the company projects that it has enough finished goods on hand to be able to fully satisfy demand for next year.
The coronavirus troubles come just as Canada Goose was hitting it stride, bringing its ultra-warm jackets and brand to the globe.
“Our numbers are great,” Reiss said of the third quarter. “I’m happy with how we performed across all geographies.”
Canada Goose’s third-quarter net income rose 14.1 percent to 118 million Canadian dollars, or 1.07 Canadian dollars per diluted share, from 103.4 million Canadian dollars, or 0.93 Canadian dollars a share, a year earlier.
Sales for the quarter ended Dec. 29 increased 13.2 percent to 452.1 million Canadian dollars. Sales in Asia doubled to 94.7 million Canadian dollars, before the coronavirus virus largely shut down commerce in the country of 1.4 billion people.
Canada Goose has only 20 of its own stores globally and is looking to keep expanding.
And Reiss stressed that the company was not only opening stores — bucking the general retail trend — but was also working to push the brick-and mortar-store into its next iteration.
The brand’s inventory-free experiential concept in Toronto saw 8,000 people during three weeks in December. Customers spent 15 minutes learning about the brand and then had an opportunity to buy digitally, with same-day shipment in some cases.
Expect to see more of the same.
“An inventory-free environment is commercially viable for us,” Reiss said. “The consumers are looking for experiences, interactions that are out of the ordinary.”
While it’s nearly impossible to not run into a sea of Canada Goose jackets on a cold day in New York City, the ceo said there’s still plenty more room for the brand.
“I don’t worry about it,” said Reiss, whose grandfather, Sam Tick, founded the business. “The important thing is we make a best-in-class product. If you look at the size of our brand and you look at the other global luxury names, we’re still really small, compared with some of the big players. There are many other brands with logos all over the place, too, and selling more product has not impacted their brand equity in any way shape or form. It goes back to quality and functionality. How many people have an iPhone?”
This is the side of the business that Reiss is clearly wanting to focus on when the coronavirus worries finally pass.
“When this is all over, [Canada Goose has] great momentum, great brand heat,” he said. “We’re ready, and I’m an optimistic guy, so I try hard to look beyond this.”
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