Is Canada Goose Getting Ready for Take Off?

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Written By Joel Gbolade

Canada Goose Holdings Inc. (NYSE: GOOS)(TSX:GOOS: CA) is a performance luxury retailer renowned for its high-priced winter parkas. The company has developed strong brand awareness, grown revenues by approximately 60% over five years, and achieved a decent level of profitability with a roughly ~18x P/E multiple on an adjusted basis.

Despite this success, the company’s stock price has dropped by around two-thirds since 2021, recently falling below its 2017 IPO level. This decline is attributed to a mixed retail environment and a slowdown in growth, which have contributed to reduced margins and flat adjusted EBIT.

In response, Canada Goose has scaled back its expansion plans in favor of improving operating efficiency and implemented significant layoffs in March.

Recent Financial Performance

Credits: DepositPhotos

Canada Goose’s 2024FQ4 results, announced on May 16, demonstrated a strong 22% year-over-year rebound in revenues and robust consumer demand for its products. Key highlights from the results include:

  • Strong e-commerce performance, driven by improved return levels, which led to a 3.5% DTC comparable sales growth, with relatively flat store comps.
  • Improved results in the Asia-Pacific and North American regions, offset by weakness in EMEA, partly due to warmer weather and a more promotional environment.
  • A 6% reduction in inventory.
  • Net income of C$0.57 per share and adjusted net income of C$0.99 per share for the full fiscal year, with adjustments including severance charges for the March workforce reduction.
  • An outlook for a 100 basis points improvement in adjusted EBIT margin and a mid-teens percentage improvement in adjusted net income per share.
  • Repurchase of nearly 2% of outstanding shares in 2024FQ4 at an average of $15.90 per share, reducing the share count by about 4% from the previous year.

Mixed Performance

While there were positive developments, some aspects of the performance were less favorable:

  • Wholesale revenues declined by 9%, consistent with Canada Goose’s strategy of reducing the number of wholesale partners.
  • Flat year-over-year store comps.
  • Flat adjusted EBIT for the full year.
  • Net debt increased to $584.1 million from $468.1 million a year ago, although it remains at a manageable level of 2x adjusted EBITDA. Some of this increase can be attributed to share repurchases.

Future Growth Strategy

Canada Goose has prioritized expansion in recent years, with revenues more than tripling since 2017. This expansion has, however, contributed to an erosion of margins.

The company’s renewed focus on improving operating efficiency aims to build a stronger foundation for future growth. Key points to consider for the long-term outlook include:

  • Strong brand awareness among millennials and Gen Z.
  • Lower obsolescence, markdown, and margin risk for inventory.
  • High purchase intent in the U.S. and China.
  • A relatively small retail store footprint, with 22 stores in China and 68 overall as of the end of March, indicating room for growth.
  • Concentration in product categories, with a mission to become an all-season brand.

Financial Metrics and Valuation

Canada Goose’s margins have historically been higher, and there is potential for improvement through better execution and business simplification.

The company has a P/E ratio of roughly ~18x on an adjusted basis, with guidance for mid-teens growth in per-share net income potentially bringing this down to about 16x.

Other valuation measures are near their lows for the past five years, including EV/Sales (~1.5x), EV/EBITDA (~8.3x), and P/FCF (~16.9x).


Several risks could impact Canada Goose’s longer-term growth:

  • Slowing brand momentum and risks associated with product and store expansion.
  • Potential market saturation due to the durability of their products.
  • Uncertainty regarding the success of efforts to improve operating efficiency.
  • Modest near-term growth projections.
  • Highly competitive luxury retail sector.
  • Unclear translation of winter outerwear brand strength to other seasonal wear.
  • Long-term effects of the significant reduction in headcount.
  • Impact of warmer weather on demand for core products.


Canada Goose Holdings Inc. faces a mixed consumer environment, cost of living headwinds, macroeconomic challenges in key markets, and weather-related impacts on demand for performance winter outerwear.

Credits: DepositPhotos

Despite these challenges, the company’s strong brand awareness and high-quality products position it well for potential recovery. Efforts to improve operating efficiency and a continued rebound in retail conditions could support margin rehabilitation and growth beyond 2025.



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