Canada Goose (NYSE: GOOS) reported Q3 EPS of Cdn$1.01, versus Cdn$1.09 reported last year. Revenue for the quarter came in at Cdn$474 million, versus Cdn$452.1 million reported last year.

Third Quarter Fiscal 2021 Business Highlights (compared to Third Quarter Fiscal 2020)

• Global e-Commerce revenue increased by 39.3%.
• DTC revenue in Mainland China increased by 41.7%.
• Total revenue increased for the first time since the onset of the pandemic.

Third Quarter Fiscal 2021 Results (compared to Third Quarter Fiscal 2020)

• Total revenue was $474.0m from $452.1m.
  • DTC revenue was $299.4m from $301.8m driven by e-Commerce growth and continued store expansion in Mainland China, offset by lower retail revenue due to COVID-19 disruptions globally.
  • Wholesale revenue was $160.8m from $145.3m. The increase was a result of the later timing of shipments as requested from partners and international distributors relative to the comparative quarter.
  • Other revenue was $13.8m from $5.0m. The increase was driven by PPE sales in support of COVID-19 response efforts.
• Gross profit was $316.4m, a gross margin of 66.8%, compared to $298.4m and 66.0%. The increase in gross profit was attributable to revenue growth and $4.8m of government subsidies. The increase in gross margin was a result of higher DTC and Wholesale gross margins, partially offset by a lower Other gross margin.
  • DTC gross margin of 77.9%, compared to 75.1%. The increase was attributable to higher pricing and favourable geographic mix (+210 bps). Gross margin was also positively impacted by $1.6m (+50 bps) of government subsidies.
  • Wholesale gross margin of 51.5%, compared to 48.5%. The increase was attributable to the net impact of higher pricing and the positive impact of volume (+180 bps) driven by parkas, partially offset by the unfavourable impact of a higher proportion of distributor sales (-80 bps). Gross margin was also positively impacted by $3.1m (+200 bps) of government subsidies.
  • Other segment gross profit was $0.3m from $1.3m. PPE gross loss and gross margin were $(0.7)m and (6.5)%.
• Operating income was $153.3m, an operating margin of 32.3%, compared to $161.4m and an operating margin of 35.7%.
  • DTC operating margin of 55.0%, compared to 56.0%. The decrease was due to lower retail profitability from COVID-19 disruptions. This was partially offset by a higher gross margin and the positive impact of e-Commerce growth.
  • Wholesale operating margin of 42.9%, compared to 38.0%. The increase was attributable to a higher gross margin and cost reduction initiatives, supplemented by $3.1m of government subsidies.
  • Other operating loss was $(80.4)m from $(62.7)m. The increase was attributable to higher operating costs including an $8.4m increase in marketing costs, and $3.3m of product development costs. In addition, there were $7.1m of unfavourable foreign exchange losses partially offset by $1.3m of government subsidies.
• Net income was $107.0m, or $0.96 per diluted share, compared to $118.0m, or $1.07 per diluted share.
• Non-IFRS adjusted EBIT was $157.9m, an adjusted EBIT margin of 33.3%, compared to $163.8m and 36.2%.
• Non-IFRS adjusted net income was $111.9m, or $1.01 per diluted share, compared to $119.7m, or $1.08 per diluted share.
• Cash was $469.0m as at quarter end, compared to $72.0m, alongside $256.2m of available borrowing capacity in the undrawn revolving facility. The increase in cash was driven by positive free operating cash flow and refinancing proceeds.

“The global strength of our brand and digital business has returned Canada Goose to growth in our biggest quarter. Through HUMANATURE, we are also rapidly advancing our sustainability and purpose-based commitments,” said Dani Reiss, President & CEO. “While we remain in an uncertain world, we are very encouraged by our strong momentum as we finish the fiscal year.”

Outlook

Given ongoing COVID-19 disruptions and uncertainties, the Company is not providing an outlook for fiscal 2021. As of the date of this release, 7 of 28 Canada Goose retail stores, representing 25% of the network, are closed.

For earnings history and earnings-related data on Canada Goose (GOOS) click here.