Canada Goose slashes forecast as coronavirus eats into Chinese growth
Luxury parka maker Canada Goose Holdings Inc. slashed expected revenue growth for the year due to "material negative impact" from the new coronavirus outbreak.
"The health crisis has resulted in a sharp decline in customer traffic and purchasing activity," the company said in a statement as it released its third-quarter financial results. "Retail stores and e-commerce across Greater China have and continue to experience significant reductions in revenue."
Global travel disruptions have also affected retail stores in international shopping destinations in North America and Europe, the company said, adding there have not been supply chain interruptions.
"The company believes that this is a temporary change in consumer behaviour due to health precautions in extraordinary circumstances," it said.
"However, the extent and duration of the disruptions remain uncertain and prolonged disruptions may also negatively impact future fiscal periods."
Canada Goose now expects annual revenue for its 2020 financial year to grow between 13.8 per cent and 15 per cent — down from the earlier expected figure of at least 20 per cent. That translates to expected revenue of between $945 million and $955 million.
Coronavirus originated in Wuhan, China. In late January, the World Health Organization declared it a global health emergency.
There are now at least 31,211 confirmed cases in China and 637 deaths, according to the WHO. Beyond China's borders, there are 270 confirmed cases in 24 countries, and one death. There are several confirmed cases in Canada — situated in Ontario and B.C.
Canada Goose has 21 stores, according to its website, including one each in Beijing, Shenyang, and Shanghai, China, as well as two in Hong Kong. It also operates locations in London, Tokyo, Milan and Paris, as well as several in Canada and the U.S.
The revised outlook came as the company reported its third-quarter financial results.
Canada Goose had a net income of $118 million, or $1.07 per diluted share, up from $103.4 million or 93 cents for the same quarter last year. Adjusted net income for the quarter ending Dec. 29 was $119.7 million, or $1.08 per share, up from $107.2 million or 96 cents per share last year.
Revenue came in at $452.1 million, up from $399.3 million for the same quarter last year.
Analysts had expected revenue of $448.2 million and adjusted net income of $1.07 per share according to financial markets data firm Refinitiv.
Canada Goose's shares were down $1.68 or 3.8 per cent at $42.47 in midday trading on the Toronto Stock Exchange.
This report by The Canadian Press was first published Feb. 7, 2020.