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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Canada Goose Holdings Inc | TSX:GOOS | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.15 | 0.98% | 15.39 | 15.31 | 15.49 | 15.60 | 15.31 | 15.31 | 142,217 | 21:12:08 |
Third Quarter Fiscal 2022 Highlights (in Canadian dollars):
Canada Goose Holdings Inc. (“Canada Goose” or the “Company”) (NYSE:GOOS, TSX:GOOS) today announced financial results for the third quarter ended January 2, 2022.
“Canada Goose’s brand momentum and supply chain resilience drove a strong performance in our largest quarter,” said Dani Reiss, President & CEO. “Our digital business continued to exceed last year’s outsized gains, alongside a sharp improvement in retail productivity. We remain confident in our long-term trajectory for revenue growth and margin expansion, notwithstanding the emergence of temporary and unexpected COVID-19 disruptions in certain markets.”
Third Quarter Fiscal 2022 Business Highlights (compared to Third Quarter Fiscal 2021)
Third Quarter Fiscal 2022 Results (compared to Third Quarter Fiscal 2021)
Revised Fiscal 2022 Outlook
Due to lower than expected revenue and retail traffic in APAC and EMEA in the current quarter, alongside new variant outbreaks and restrictions, the Company now expects the following for fiscal 2022:
This is based on a number of assumptions, including the following:
Within the meaning of applicable securities laws, this outlook constitutes forward-looking information. The purpose of this outlook is to provide a description of management's expectations regarding the Company's financial performance and may not be appropriate for other purposes. Actual results could vary materially as a result of numerous factors, including the extent and duration of operational disruptions that may affect our business as a result of the COVID-19 pandemic and other risk factors, many of which are beyond the Company’s control. See “Cautionary Note Regarding Forward-Looking Statements”.
Conference Call Information
Dani Reiss, President and Chief Executive Officer and Jonathan Sinclair, EVP and Chief Financial Officer, will host the conference call at 9:00 a.m. Eastern Time on February 10, 2022. Those interested in participating are invited to dial (877) 804 7379 or (629) 228 0700 if calling internationally and reference Conference ID 9894131 when prompted. A live audio webcast of the conference call will be available online at http://investor.canadagoose.com.
About Canada Goose
Founded in 1957 in a small warehouse in Toronto, Canada, Canada Goose (NYSE:GOOS, TSX:GOOS) is a lifestyle brand and a leading manufacturer of performance luxury apparel. Every collection is informed by the rugged demands of the Arctic, ensuring a legacy of functionality is embedded in every product from parkas and rainwear to apparel and accessories. Canada Goose is inspired by relentless innovation and uncompromised craftsmanship, recognized as a leader for its Made in Canada commitment. In 2020, Canada Goose announced HUMANATURE, its purpose platform that unites its sustainability and values-based initiatives, reinforcing its commitment to keep the planet cold and the people on it warm. Canada Goose also owns Baffin, a Canadian designer and manufacturer of performance outdoor and industrial footwear. Visit www.canadagoose.com for more information.
Condensed Consolidated Interim Statements of Income and Comprehensive Income (unaudited) (in millions of Canadian dollars, except share and per share amounts)
Third quarter ended
Three quarters ended
January 2, 2022
December 27, 2020
January 2, 2022
December 27, 2020
$
$
$
$
Revenue
586.1
474.0
875.3
694.9
Cost of sales
172.3
157.6
295.8
279.5
Gross profit
413.8
316.4
579.5
415.4
Gross margin
70.6 %
66.8 %
66.2 %
59.8 %
SG&A expenses
184.1
144.7
357.0
255.7
SG&A expenses as % of revenue
31.4 %
30.5 %
40.8 %
36.8 %
Depreciation and amortization
23.8
18.4
66.0
50.6
Operating income
205.9
153.3
156.5
109.1
Operating margin
35.1 %
32.3 %
17.9 %
15.7 %
Net interest, finance and other costs
7.6
10.0
32.0
22.7
Income before income taxes
198.3
143.3
124.5
86.4
Income tax expense
46.4
36.3
20.3
19.1
Effective tax rate
23.4 %
25.3 %
16.3 %
22.1 %
Net income
151.9
107.0
104.2
67.3
Other comprehensive (loss) income
(8.3)
(1.5)
(9.7)
2.6
Comprehensive income
143.6
105.5
94.5
69.9
Earnings per share
Basic
$ 1.42
$ 0.97
$ 0.96
$ 0.61
Diluted
$ 1.41
$ 0.96
$ 0.95
$ 0.61
Weighted average number of shares outstanding
Basic
106,915,147
110,201,805
108,999,722
110,136,707
Diluted
107,840,995
111,239,180
109,969,956
110,928,199
Non-IFRS Financial Measures:(1)
EBIT
205.9
153.3
156.5
109.1
Adjusted EBIT
206.9
157.9
162.8
127.1
Adjusted EBIT margin
35.3 %
33.3 %
18.6 %
18.3 %
Adjusted net income
152.6
111.9
115.8
85.0
Adjusted net income per basic share
$ 1.43
$ 1.02
$ 1.06
$ 0.77
Adjusted net income per diluted share
$ 1.42
$ 1.01
$ 1.05
$ 0.77
(1) See “Non-IFRS Financial Measures”.
Condensed Consolidated Interim Statements of Financial Position (unaudited) (in millions of Canadian dollars)
January 2, 2022
December 27, 2020
March 28, 2021
Assets
$
$
$
Current assets
Cash
407.6
469.0
477.9
Trade receivables
108.0
118.2
40.9
Inventories
368.1
339.0
342.3
Income taxes receivable
0.5
5.4
4.8
Other current assets
38.1
25.0
31.0
Total current assets
922.3
956.6
896.9
Deferred income taxes
64.1
47.8
46.9
Property, plant and equipment
123.1
122.5
116.5
Intangible assets
154.7
156.1
155.0
Right-of-use assets
241.2
240.4
233.7
Goodwill
53.1
53.1
53.1
Other long-term assets
8.2
0.1
5.1
Total assets
1,566.7
1,576.6
1,507.2
Liabilities
Current liabilities
Accounts payable and accrued liabilities
244.5
207.7
177.8
Provisions
43.2
45.0
20.0
Income taxes payable
36.9
21.0
19.1
Short-term borrowings
3.8
7.0
—
Current portion of lease liabilities
61.7
44.3
45.2
Total current liabilities
390.1
325.0
262.1
Provisions
30.5
19.5
25.6
Deferred income taxes
19.4
22.1
21.6
Term loan
370.8
376.1
367.8
Lease liabilities
208.5
216.6
209.6
Other long-term liabilities
22.5
16.4
20.4
Total liabilities
1,041.8
975.7
907.1
Shareholders' equity
524.9
600.9
600.1
Total liabilities and shareholders' equity
1,566.7
1,576.6
1,507.2
Non-IFRS Financial Measures
This press release includes references to certain non-IFRS financial measures such as EBIT, adjusted EBIT, adjusted EBIT margin, adjusted net income and adjusted net income per basic and diluted share. These financial measures are employed by the Company to measure its operating and economic performance and to assist in business decision-making, as well as providing key performance information to senior management. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors and analysts use this information to evaluate the Company’s operating and financial performance. These financial measures are not defined under IFRS nor do they replace or supersede any standardized measure under IFRS. Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. Definitions and reconciliations of non-IFRS measures to the nearest IFRS measure can be found in our MD&A. Such reconciliations can also be found in this press release under “Reconciliation of Non-IFRS Measures”.
Reconciliation of Non-IFRS Measures
The tables below reconcile net income to EBIT, adjusted EBIT, and adjusted net income for the periods indicated. Adjusted EBIT margin is equal to adjusted EBIT for the period presented as a percentage of revenue for the same period.
Third quarter ended
Three quarters ended
CAD $ millions
January 2, 2022
December 27, 2020
January 2, 2022
December 27, 2020
Net income
151.9
107.0
104.2
67.3
Add (deduct) the impact of:
Income tax expense
46.4
36.3
20.3
19.1
Net interest, finance and other costs
7.6
10.0
32.0
22.7
EBIT
205.9
153.3
156.5
109.1
Unrealized foreign exchange (gain) loss on Term Loan Facility (a)
(0.5)
2.4
1.6
1.4
Share-based compensation (b)
0.1
0.1
0.2
0.3
Net temporary store closure costs (c)
—
1.0
0.2
6.8
Net excess overhead costs from temporary closure of manufacturing facilities (c)
—
—
—
4.3
Pre-store opening costs (d)
1.0
1.1
3.1
4.8
Transition of logistics agencies (g)
—
—
0.1
2.2
Costs of the Baffin acquisition (h)
—
0.1
—
1.0
Non-cash provision release (i)
—
—
—
(3.0)
Other (k)
0.4
(0.1)
1.1
0.2
Total adjustments
1.0
4.6
6.3
18.0
Adjusted EBIT
206.9
157.9
162.8
127.1
Adjusted EBIT margin
35.3 %
33.3 %
18.6 %
18.3 %
Third quarter ended
Three quarters ended
CAD $ millions
January 2, 2022
December 27, 2020
January 2, 2022
December 27, 2020
Net income
151.9
107.0
104.2
67.3
Add (deduct) the impact of:
Unrealized foreign exchange (gain) loss on Term Loan Facility (a)
(0.5)
2.4
1.6
1.4
Share-based compensation (b)
0.1
0.1
0.2
0.3
Net temporary store closure costs (c) (e)
—
1.0
0.2
8.1
Net excess overhead costs from temporary closure of manufacturing facilities (c)
—
—
—
4.3
Pre-store opening costs (d) (f)
1.1
1.2
3.5
5.4
Transition of logistics agencies (g)
—
—
0.1
2.2
Costs of the Baffin acquisition (h)
—
0.1
—
1.0
Non-cash provision release (i)
—
—
—
(3.0)
Acceleration of unamortized costs on Term Loan Facility Repricing (j)
—
1.1
9.5
1.1
Restructuring expense (c)
—
—
—
1.7
Other (k)
0.4
0.1
1.1
0.4
Total adjustments
1.1
6.0
16.2
22.9
Tax effect of adjustments
(0.4)
(1.1)
(4.6)
(5.2)
Adjusted net income
152.6
111.9
115.8
85.0
(a) Unrealized gains and losses on the translation of the Term Loan Facility from USD to CAD, net of the effect of derivative transactions entered into to hedge a portion of the exposure to foreign currency exchange risk.
(b) Non-cash based compensation expense on stock options issued prior to the Company’s initial public offering (“IPO”) under the Legacy Plan and cash payroll taxes paid of $0.1m and $0.1m in the third and three quarters ended January 2, 2022, respectively, (third and three quarters ended December 27, 2020 - less than $0.1m and $0.1m, respectively) on gains earned by option holders (compensation) when stock options are exercised.
(c) Net temporary store closure costs of $nil and $0.2m were incurred in the third and three quarters ended January 2, 2022, respectively. These were comprised of temporary store costs of $nil and $0.4m, partially offset by government subsidies of $nil and $0.2m in Europe in the third and three quarters ended January 2, 2022, respectively. Globally, government subsidies of $6.4m and $27.1m were recognized in the third and three quarters ended December 27, 2020, respectively. Government subsidies were recorded as a reduction to excess overhead costs from temporary closure of manufacturing facilities ($nil and $1.3m), temporary store closure costs (less than $0.1m and $1.4m), and restructuring expense ($nil and $0.4m), for the third and three quarters ended December 27, 2020, respectively. The benefit of $6.4m and $26.7m of government subsidies therefore remained in adjusted EBIT as a reduction to the associated wage costs for the third and three quarters ended December 27, 2020, respectively.
(d) Costs incurred during pre-opening periods for new retail stores, including depreciation on right-of-use assets.
(e) Includes $nil and less than $0.1m of interest expense on lease liabilities for temporary store closures for the third and three quarters ended January 2, 2022, respectively (third and three quarters ended December 27, 2020 - $0.1m and $1.4m, respectively).
(f) Pre-store opening costs incurred in (d) above plus $0.1m and $0.4m of interest expense on lease liabilities for new retail stores during pre-opening periods for the third and three quarters ended January 2, 2022, respectively (third and three quarters ended December 27, 2020 - $0.1m and $0.6m, respectively).
(g) Costs incurred for the transition of logistics, warehousing, and freight forwarding agencies to enhance our global distribution structure.
(h) Costs in connection with the Baffin acquisition and the impact of gross margin that would otherwise have been recognized on inventory recorded at net realizable value less costs to sell.
(i) Release of a non-cash sales contract provision as a result of the expiration of the statute of limitations in the respective jurisdiction during the three quarters ended December 27, 2020.
(j) Non-cash unamortized costs accelerated in connection with the Repricing Amendment on April 9, 2021 during the three quarters ended January 2, 2022 and the amendments to the Term Loan Facility on October 7, 2020 and May 10, 2019 during the three quarters ended December 27, 2020.
(k) includes costs for class action lawsuits and rent abatement received.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, including statements relating to the execution of our proposed strategy, our operating performance and prospects, and the general impact of the COVID-19 pandemic on the business. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “believe,” “could,” “continue,” “expect,” “estimate,” “forecast,” “may,” “potential,” “project,” “plan,” “would,” “will,” “intend”, “predict” and other words of similar meaning. Each forward-looking statement contained in this press release, including, without limitation, our fiscal 2022 financial outlook and the related assumptions included herein is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Our business is subject to substantial risks and uncertainties. Applicable risks and uncertainties include, among others, the impact of the ongoing COVID-19 pandemic, and are discussed under the headings “Cautionary Note regarding Forward-Looking Statements” and “Factors Affecting our Performance” in our MD&A as well as in our “Risk Factors” in our Annual Report on Form 20-F for the year ended March 28, 2021. You are also encouraged to read our filings with the SEC, available at www.sec.gov, and our filings with Canadian securities regulatory authorities available at www.sedar.com for a discussion of these and other risks and uncertainties. Investors, potential investors, and others should give careful consideration to these risks and uncertainties. We caution investors not to rely on the forward-looking statements contained in this press release when making an investment decision in our securities. The forward-looking statements in this press release speak only as of the date of this release, and we undertake no obligation to update or revise any of these statements.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220210005423/en/
Investors: ir@canadagoose.com
Media: media@canadagoose.com
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