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Canada Goose Outlook Hit by COVID-19 Restrictions

Canada Goose Holdings Inc. posted continued gains in the third quarter, but revised down its outlook for the year as traffic in Asia and Europe took a hit from COVID-19.

While investors hammered the company’s stock down 14.2 percent to $29.43 in premarket trading on Thursday, president and chief executive officer Dani Reiss told WWD the brand’s underlying momentum remains strong, with shoppers logging in to buy while they stayed away from stores.

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“It’s a COVID-19 restriction story,” Reiss said. “Around various parts of the world, there have been different restrictions and that’s impaired traffic to stores. Some stores were closed in some areas.…Traffic was impaired just because people were guided not to leave their homes.”

But the CEO said that over the pandemic business has come back strongly as restrictions are lifted and pointed to the strength in North America as a proof point.

“The areas where we’ve seen there are fewer restrictions, you see things are turning back to normal faster,” he said. “People are excited for the pandemic to end in general. I’m optimistic that it will.

“What’s really important is that we’ve been able to perform as well as we have through these challenging times and our brand has continued to endure and to grow at 26.5 percent in this quarter and we continue to grow,” he said. “We’ve been a growth company since before we became a public company.”

Reiss plans to keep that positioning, focusing on building the parka brand out into a fuller lifestyle offering, launching footwear last year, expanding in apparel and more.

The company’s third-quarter profits rose 36.1 percent to 143.6 million Canadian dollars as total revenues increased 23.6 percent to 586.1 million Canadian dollars (a growth rate that was depressed by sales of personal protective equipment a year ago when the company stepped up to boost supplies for the pandemic).

Canada Goose’s global e-commerce sales rose by 28.1 percent while direct-to-consumer revenues in mainland China increased by 35.1 percent, showing continued growth in a key market in the brand’s expansion plans. Reiss noted that digital sales in China grew by more than 60 percent.

But Wall Street seems focused on the outlook revision.

The company’s total revenues this year are set to increase to 1.09 billion to 1.105 billion Canadian dollars, down from the previous projection calling for a range of 1.125 billion to 1.175 billion Canadian dollars. Net income per diluted share was adjusted down to a range of 1.02 to 1.11 Canadian dollars from the 1.17 to 1.33 Canadian dollars previously projected.

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