(Reuters) -Luxury apparel maker Canada Goose missed estimates for second-quarter revenue on Thursday, as its efforts to drive sales by bolstering its marketing and promotional strategies failed to deliver results in a weak demand environment. U.S.-listed shares of the company fell 6% in premarket trading as Canada Goose also posted a wider-than-expected quarterly loss. The […]
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Canada Goose misses quarterly sales estimates on softening demand
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(Reuters) -Luxury apparel maker Canada Goose missed estimates for second-quarter revenue on Thursday, as its efforts to drive sales by bolstering its marketing and promotional strategies failed to deliver results in a weak demand environment.
U.S.-listed shares of the company fell 6% in premarket trading as Canada Goose also posted a wider-than-expected quarterly loss.
The company has been under margin pressure as it ramps up marketing spend and pivots away from core high-margin parkas in a bid to broaden its product assortment.
Wholesale revenue dipped 1% in the quarter, while direct-to-consumer sales rose 21.8%. SG&A expenses climbed to $187.7 million from $162.5 million a year earlier, driven by higher labor and training costs ahead of the holiday season and increased marketing spend tied to its fall and winter campaigns.
Adjusted profit margin shrank 5.2% in the quarter from a 0.9% jump a year ago.
Canada Goose posted a loss of 14 Canadian cents per share, which was bigger than analysts’ estimates of a loss of 11 Canadian cents per share, according to data compiled by LSEG.
The company reported a 1.8% jump in revenue to C$272.6 million ($194.38 million) in the quarter ended September 28, compared with the estimates of C$279.3 million, as per data compiled by LSEG.
In August, a media report said controlling shareholder Bain Capital had received bids to take Canada Goose private at a valuation of about $1.4 billion.
($1 = 1.4024 Canadian dollars)
(Reporting by Chandni Shah and Savyata Mishra in Bengaluru; Editing by Anil D’Silva)