Shares of Canada Goose (NYSE: GOOS) were gaining altitude on Thursday after the maker of high-end parkas and outdoor gear posted better-than-expected results in its fourth-quarter earnings report, paced by growing demand in the U.S. and China.
The stock closed Thursday's trading session 16.7% higher on the news.
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The Goose is loose
Canada Goose posted accelerating growth on the top line with revenue up 22% to $262.9 million, a significant improvement from single-digit growth earlier in the year, and easily beat estimates of $231.1 million.
Much of that growth came due to a jump in sales related to a higher number of friends and family sales as the company made an effort to sell off discontinued inventory.
Nonetheless, direct-to-consumer (DTC) sales were strong, up 21% to $199.4 million due to strong results in North America and the Asia-Pacific region, and DTC comparable sales were up 3.5%.
Wholesale revenue was down 9% due partly to planned optimizations of the wholesale business.
Gross profit rose to $171.1 million, and adjusted operating income jumped from $12.9 million to $17.3 million. On the bottom line, Canada Goose reported adjusted earnings per share of $0.14, up from $0.09 in the year-ago quarter.
CEO Dani Reiss said, "Our fourth-quarter results came in ahead of guidance, reflecting the power of our iconic brand and the disciplined execution of our strategy by our team."
What's next for Canada Goose
Looking ahead, Canada Goose's guidance was modest as it's still knee-deep in a brand and strategy reset. Management said that revenue would grow in the low single digits in fiscal 2025, with DTC comp sales in the low single digits and a 20% decline in wholesale revenue as it scales back on that business. It also called for adjusted net income to grow in the mid-teens.
Additionally, management said it was withdrawing the long-term financial targets it announced last February "due to changes in business conditions including a more challenging consumer spending environment."
While that news may be disappointing, it seems like it was expected. Canada Goose still has work to do to make a full recovery, but its fourth-quarter results indicate the business is moving in the right direction. It's not surprising the beaten-down stock moved higher on the news.
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