Canada Goose Holdings Inc. cut its annual revenue and profit forecasts on Thursday as COVID-19 related disruptions in China and slowing momentum in North America curtailed the luxury parka maker's sales in its biggest quarter of the year.
"We did face challenges during our seasonally significant third quarter, the largest being in ... China where disruptions were worse than we had anticipated, impacting our performance significantly," Canada Goose CEO Dani Reiss said during a call with analysts.
"We did expect a certain level of disruption. What we did not anticipate was the sudden reopening in early December," he said. "This led to a surge in infections, which had a significant impact on our business during what is typically our most productive trading month."
The rapid spread of COVID-19 decreased consumer traffic dramatically, while staffing levels in China were also affected due to illness, Reiss said.
In North America, the company recorded softening demand towards the end of the quarter ended Jan. 1, with a continuation of "mixed results" since then, he said.
"We believe these pressures to be temporary and we continue to focus on driving brand heat and relevance," Reiss said.
The company's net income attributable to shareholders was $134.9 million or $1.28 per diluted share for the quarter, down from $151.3 million or $1.40 per diluted share a year earlier.
Revenue in what was the third-quarter of the company's 2023 financial year totalled $576.7 million, down from $586.1 million.
On an adjusted basis, Canada Goose said it earned $1.27 per diluted share in its latest quarter compared with an adjusted profit of $1.40 per diluted share a year earlier.
In its full-year outlook, the company said it now expects total revenue between $1.175 billion and $1.195 billion, down from its earlier guidance for between $1.2 billion and $1.3 billion.
Canada Goose also said it now expects adjusted net income per diluted share for the full year between 92 cents and $1.03, down from its earlier guidance for between $1.31 and $1.62.
This report by The Canadian Press was first published Feb. 2, 2023.
Companies in this story: (TSX:GOOS)
Brett Bundale, The Canadian Press
